Aug 8, 2016, 6:05am MDT

Phil Kalin President and CEO, Pinnacol Assurance

Colorado’s workers’ compensation system is one of the best in the nation because of the way it effectively balances reasonable premiums for employers and fair benefits for injured workers. The system helps retain business and lure new employers with its stability and financial security, making it a feather in the state economy’s cap.

But that will be threatened if the ballot initiative for Amendment 69, or ColoradoCare, is approved by voters in November. No doubt every Coloradan will be affected by the change, but the impact on employers, injured workers, and the entire workers’ comp system cannot be underestimated.

As an insurer that provides workers’ comp exclusively, why is Pinnacol concerned about the health care system? Under current law, workers’ comp insurance covers the health care needs of injured workers and replaces their lost wages, or indemnity, for as long as they are out of work. But by bringing the medical payments of workers’ comp under its umbrella, ColoradoCare would strip injured workers of a highly effective medical care system.

The system ensures every injured worker receives high quality care in a timely way from a physician accredited in occupational medicine, and gives them opportunity to safely return to work.

Workers’ comp is extremely complex, which is why California and Vermont – the only other states to seriously explore (and ultimately back away from) single-payer health care –excluded workers’ comp from their proposals.

For example, the director of health care reform in Vermont said that including workers’ comp in its single-payer plan could:

  • Increase overall costs to the employer
  • Increase administrative burdens
  • Create regulatory conflicts
  • Create coverage issues

Supporters of Amendment 69 say that integrating workers’ comp into ColoradoCare will save Colorado businesses money because their workers’ comp premiums will go down. But any workers’ comp savings will be eroded quickly by lower worker productivity and increased wage replacement costs. That’s because ColoradoCare won’t have mechanisms in place to do all the things many workers’ comp insurers do, like work with employers to keep their employees safe and minimize the potential for injury, and work with doctors to help injured workers get back to work in a timely and safe way. Even things like paying for injured workers to travel to and from doctor appointments are not accounted for in ColoradoCare.

And that’s not the only way ColoradoCare would diminish service and increase costs. Currently, when a workplace injury is caused by a third party, workers’ comp insurers can seek to recover funds from that third party through a process called subrogation. But Amendment 69 would give ColoradoCare first rights to subrogate, weakening workers’ comp insurers’ ability to collect for lost wages. That would result in millions of dollars of otherwise recoverable funds not being refunded to Colorado employers every year.

Amendment 69 also does a disservice to Colorado employers because, by leaving work comp insurers with only wage replacement, it eliminates insurers’ ability to manage costs. That would lead to many insurers leaving the state, destabilizing the entire system. Employers will pay the price.

As a political subdivision of the state, Pinnacol cannot donate corporate funds to campaign for or against a ballot initiative. However, we can take a position on an issue such as this that directly affects us, and our board has voted to oppose Amendment 69.

Colorado has proven it can make workers’ comp work for employers and injured employees – let’s not shake it up with the cost and uncertainty that would come with ColoradoCare.

Phil Kalin is president and CEO of Pinnacol Assurance, a state-chartered company which supplies policies to about 57 percent of Colorado businesses. He can be reached at 303-361-4891, or by email, [email protected]


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Donald J. Kaufman, Attorney at Law

(970) 947-1776