HB1012 Unintended consequence: more fraud in workers comp claims

HB1012 by Rep. Morgan Carroll (D) and Sen. Louis Pace (D)

CONCERNING LIMITATIONS ON THE USE OF SURVEILLANCE OFEMPLOYEES WHO HAVE SUBMITTED A WORKERS' COMPENSATION CLAIM.

STATUS: 02/26/2010 House Committee on Appropriations Refer Amended to House Committee of the Whole

CRBC Position: OPPOSE
This is another assault on PinnacleAssurance, the quasi-private company that is the "insurer of last resort" for Workers Compensation insurance in Colorado. It is funded by the private-sector companies that buy its insurance.

HB1012 Increases the penalty for violating the workers' compensation laws from up to $500 to up to $1,000. Changes the mental state from "willfully" to "knowingly" in the statute that penalizes denying workers' compensation medical benefits, delaying payment of medical benefits for more than 30 days, or stopping payments. Allows the director of the division of workers' compensation or an administrative law judge to apportion the penalties, in whole or part, among the aggrieved party, the medical services provider, and the workers' compensation cash fund.

A Catch-22 and extremely punitive bill for employers. The Bill forbids an employer from verifying if an employee is actually disabled from a work-related incident unless there is some evidence of fraud, which an employer can't find without "surveillance" of some type. The change from "willfully" to "knowingly" not paying or delaying payment to an employee lowers the threshold of when a penalty may be incurred by an employer.

HB1012 would:

• Drive up premiums for Colorado employers by allowing workers' compensation fraud to go undetected;
• Limit and slow down investigations of fraud, which require a quick response;
• Clog the legal system as other channels for fighting fraud are eliminated;
• Undermine the credibility of legitimate claims of injured workers by driving up costs and allowing fraudulent claimants to receive benefits;
• Negatively impact all workers' comp carriers in Colorado, affecting the state's businesses and workers alike.
  
  ACTION: Contact your Representative about how HB1012 will affect your business.