Wednesday, January 18, 2012

Pinnacol Privatization Again in the News

The Denver Post is reporting that business groups and others are upset with Pinnacol's ads touting the benefits of privatizing Pinnacol Assurance. It is asserted the ads violated an agreement not to lobby on the issue while the matter is under review by a task force. What the article points out is that Pinnacol is the state's insurer of last resort for high risk businesses. That is why Pinnacol was originally set up by the state of Colorado and then has grown to be the largest insurer in Colorado of workers compensation claims. This effort to privatize is not surprising. Pinnacol is large, apparently thriving, with ample funds available that in the past the state was interested in obtaining. My experience tells me that when a nonprofit becomes quite successful the entity wants to move out on its own. I saw that with Blue Cross Blue Shield when it became Anthem. There can be interest in expansion beyond the state borders and Pinnacol executives can operate unfettered by state oversight. In theory the state gets an investment apparently worth $340 million and a dividend every year. Of course Pinnacol's offers seem to vary which is, I suspect, just part of the negotiating. The real question I have is whether privatization might impair the very purpose for the state's interest which was to insure high risk ventures. The construction trades have many injuries and are costly to insure. Without state involvement might this endanger state businesses? Private insurers certainly have more freedom to operate than an entity with state oversight. Of course my other concern is valuation but that is negotiable.

Saturday, January 07, 2012

Maximum Benefit Rates

The calculations for top dollar benefits can vary in Colorado depending on your date of injury and the allowable maximum rate on your date of work injury. Let's say you lose an arm or leg but are not totally disabled. What is the highest permanent benefit you can receive? For injuries after July 1, 2011 the max is $54,202.72 but if you were hurt before July 1, 2010 it might be only $53,067.04 or even less. Be aware this is strictly for the loss of an arm or leg without more. Always review with an attorney all the injuries you sustained at work but also your past medical history. At times a rather minor injury may nonetheless be significant enough to make you totally disabled. The rating or per cent of your medical impairment is not always the end of the story. Impairment is not the same as disability in many cases. In this area, more then anywhere, a workers comp attorney can be invaluable in analyzing the situation. Getting back to discussing the maximum rates, effective for injuries after July 1, 2011 the highest scar benefit can be as much as $8,792.00. Next, the most you can collect when you combine temporary and permanent benefits is $153,210.00 although this cap does not apply to those totally disabled. Be aware that these amounts are not the minimum you can collect so benefits can be less or even zero if your claim is not compensable(many claims are disputed). There are many factors that go into assessing impairment and disability but the caps do remain a top dollar limit on benefits in most cases. Those totally disabled or with a need for long term medical care may still have higher benefits. By way of example a few years ago I had a case where the claimant had a high rating but had collected all but a few thousand more before reaching the cap for combined temporary and permanent benefits. The case settled for much much more because of a concern he was totally disabled. However for those able to return to work the caps must be a consideration. Credit goes to Judge Eley for calculating the above figures for us.