Pinnacol Bonuses and Travel audited

The Denver Post is indicating that Pinnacol was audited by the state in this article. Pinnacol Assurance is the state's largest workers compensation insurer and has been in the news often in the last year. The criticism is that Pinnacol pays higher then average bonuses and its travel benefits were also high. Of course Pinnacol is not completely public and operates also as a private insurer so it is a hybrid. In any event the criticism continues though it is nothing like the Wall Street bonuses we have read about. Pinnacol seems to be doing pretty well though the state and many others are dealing with the recession. Some would say it is at the expense of claimants and business owners. Others would say it is just doing a good job. This story is being reported everywhere. It is on Channel 7 News. At the Denver Business Journal it is reported with the attached audit should you wish to read the details.

Supreme Court issues decision on AWW

In the Simpson/Bennett cases the Colorado Supreme Court reversed the Court of Appeals to the extent it used the concept of date of disablement to determine a claimant's average weekly wage or AWW by applying a higher maximum rate in effect years later. The wage calculation can be a very important figure that is used to pay out benefits. The higher the calculation the higher the benefits may be. The case reviews the two ways a judge can determine AWW. One way is the statutory way which can involve computing your wage as of the date of injury. Another allows a judge to use his discretion when another way would be more appropriate. For the last year we also dealt with the concept of date of disablement which suggests another approach. Actually most of us in the field realized that the date of disablement concept is unnecessary anyway in most cases. The discretion given a judge is enough to afford him the ability to figure an appropriate wage if he exercises that discretion. Usually your wage at time of injury includes tips and overtime, perhaps room and board and perhaps even the cost of health insurance if it was paid in part by your employer and can be cancelled. Using some other concept seemed to be somewhat confusing but it came because of a prior Supreme Court case called Avalanche. Now the court simply corrected itself although the rest of that prior case still holds that wage calculations may include a subsequent wage if the judge in exercising his discretion decides it is appropriate.

Memorial Day...for our heroes thank you!

So many of us owe so much to those who served and stood up for this country. Today is special as we pause to thank them and celebrate their efforts. From the Revolutionary War where heroes starved and froze at Valley Forge to every war and action since where they dared to go to protect our country we honor them today. They were and still are placed at risk for all of us. To those who served and stayed true to the spirit of this country we cannot forget the effort they made was to be there for every American. One reported story seemed a special one to me of a good man who served his country at war and at peace. Now he rests at Arlington in a simple grave that only shows him as a soldier. May we all be inspired to do what is right not just what is popular.

Workers Comp Penalties are Increased

One statutory change that was signed as law by the governor pertains to penalties. The maximum penalty for a violation of a workers comp law/order is now $1000.00 a day although it can be apportioned or split with half or more to the party and the rest to a fund. Any penalty remains in the discretion of the judge. I would prefer that penalties be imposed more often in workers compensation proceedings where benefits are withheld. I would also prefer that they have some teeth rather then be a minimal amount. If a penalty is meant to punish or teach a lesson it fails to do that if the time and expense of proceeding makes it not wise to proceed. The victim if you will should not be the one punished. That just fails to enforce the intent of the provision. In any event the legislature is increasing the amount that can be imposed as a penalty.

Pinnacol Again in the news...for golf getaway.

The Denver Post is reporting that Pinnacol Board members were at a Pebble Beach golf resort where a round is $500 and the room rate starts at nearly $700 a night. Pinnacol is partly private and partly public. They are the largest workers compensation insurer in Colorado. Looks like the media is investigating the expenses of the trip and Pinnacol is asserting its records are confidential business documents. Pinnacol has been a state agency/political subdivision since 1915 but has been given more autonomy over the years. It has sought even more independence but is also under some scrutiny. This latest news is certainly keeping them in the public eye. Pinnacol can surveil injured workers. Looks like the shoe is on the other foot right now. The comments following the news article are also interesting.
UPDATE: This is an interesting read but mostly focuses on Pinnacol must change its ways.

Brochure Now Required in all Workers Comp cases

A new Colorado statute has addressed a disclosure brochure to be provided to all claimants. It is a very concise disclosure on the subject of workers compensation. Seems like an advisory of the claim process and your rights as a claimant. That claim process is indeed quite complicated and the "brochure" seems designed to provide basic information and is required to be provided to you. No amount of disclosures will ever simplify the process but it does give the claimant a heads up on it. The problem with information is not that it is bad but that it can be incomplete. In workers compensation it is not possible to be completely accurate on all matters at all times. There are simply too many cases, too many rules, too many statutes and much more. For example there are tips for physicians and AMA Guides that are outdated but part of the workers comp process. Then as laws change you may come under old law or the new law or both. As recently as in the Nelson case we can see the clash of the old and new. Looking at the brochure I can say it is also not entirely accurate. One example is that it says an Admission will contain your wage but that is not always accurate. My office received a recently filed Admission without any wage figure. The point is this new Brochure can be helpful but also use your common sense and when possible obtain legal representation.

Update on the Status of Colorado Bills

Here is a link to a summary on the status of the various bills which may impact Colorado workers compensation matters. I'll comment in a later post on some of these but for the time being the link really does a very good job of giving us a heads up on the proposed bills some of which have passed and been signed by the governor. It appears for this year the legislative activity is just about over but it may take a several more days to see what is passed and signed by the governor.

Supreme Court Affirms the Nelson case

The Colorado Supreme Court affirmed the Court of Appeals decision in the Nelson case. In Nelson the claimant had obtained an advance lump sum of future permanent total benefits and years later sought another advance. The problem posed by the case is that the claimant had exhausted the advance amount earlier and only sought the new advance when the law was changed. The original statutory top dollar advance was $26292 and the statute was changed to allow a $60000 advance. Is the insurer liable for this higher advance when it was not the law back when the claimant was injured? The Supreme Court said yes it was. This decision was not unanimous and 3 judges dissented. But the majority controls. Both sides recognized that the law was not to be applied retroactively but the majority indicated that the law change was procedural so it would apply to anyone applying for a lump sum as of today. Procedural laws are not really changing rights or liabilities as compared to laws which are substantive changes in rights or liabilities. A substantive law change cannot be imposed on the parties covered by an older law. For example if the benefits were increased by a statutory change to 100% wage loss it could not be imposed on the parties later on. The higher wage would be a substantive change. So in this case it seems the majority and dissenters disagreed on whether the law change was procedural or substantive. The majority felt the advance was not extra compensation and the dissent seems to view it as giving the claimant a higher benefit because he receives value sooner then spread out over his lifetime. Mathematically when we do present value analysis there is no real difference. Of course people can die young or outlive expectations so either side may have the advantage here and now we come to another point I have not heard recently. The court said that the law should be liberally construed in favor of the injured worker so it did not split hairs here and ruled in favor of the claimant getting another advance. I posted on the Court of Appeals decision earlier.

Notices of Rulemaking

Based on statutory changes and a need to make rules to comply with law changes the Colorado Division of Workers Compensation is moving forward with proposed new rules in certain areas. The Division lets us know ahead of time what is coming up to consider and this can be viewed here. One proposed change which will likely be approved is a new and more current life expectancy table. Such a table is primarily used in the computations for permanent total disability. Those benefits are paid out every other week and when we try to settle them we have to mathematically estimate the present value of those checks allowing for inflation and other factors. It is a bit like a home mortgage in that the cash price for the house is one figure and the monthly mortgage over many years adds up to a much higher number. Life expectancy is plugged into the math calculations to help compute the cash or present value of your biweekly checks. The longer you are figured to live the higher the cash value. The table now in use has not been updated in years. I took a quick look at the new proposed table. In one example the table changes the expectancy from 23.1 to 27 for a 58 year old. The other proposed rules concern surveys of claimants and insurance IME matters.

Colorado Labor Department on Twitter

Colorado presses on into the 21st Century! They twitter...or is it tweat? In any event these are short comments which you can access or have sent to you. The subjects vary a great deal but can include workers compensation, unemployment or other areas within the purview of the Colorado Department of Labor. My view is more is better then less...I recall the days when obtaining information was not so easy. Now we can do our legal research online. In the old days legal research was very time consuming and meant handling many big law books. You then copied pages by taking the book to the copier and page by page making a copy of a case. Now I can be on a laptop and directing a wireless printer to copy the case. With the development of the computer age we have seen an enormous increase in knowledge and efficiency even if at times we are all frustrated by technology. Just some 30 years ago we were in its infancy. In any event Colorado is active on the internet. It is making available many resources for all of us.

ICAP says no wage adjustment in Whalen case

In Whalen the claimant appealed a decision by the hearing judge not to make any adjustment in the wage calculations when the claimant lost his employer health coverage and went on medicaid. Normally when you have health coverage through your employer then the cost of obtaining similar coverage is added into the wage calculations. This often results in higher temporary and permanent benefits. In a sense being provided health coverage by your employer is a wage benefit so losing it should mean an adjustment must be made. But in this case ICAP (the Industrial Claim Appeals Panel) decided the appeal against the claimant. ICAP reviewed the law and decided that medicaid was an equivalent insurance and since it was at no cost to the claimant then nothing gets added into the wage calculations. There was a dissent so perhaps this case will be appealed to a higher court. ICAP did reason that since medicare was an equivalent health insurance (based on an older case) then medicaid was also. The problem for me is that medicaid is provided at no cost to the poor. So a claimant with an employer health insurance who loses it and then cannot afford anything turns to medicaid. He may be on medicaid for only a short period yet this case says the fact it is free means no added benefit for the loss of the employer health insurance. His inability to purchase health coverage is then used against him. The statute on wages is at 8-40-201(19). In 2006 the Colorado Supreme Court decided in the Ray case that you add the cost to purchase health coverage to the wage figures and if the claimant cannot or does not actually purchase it then it is still added. Medicaid is a non-purchase matter and it would be interesting to see what a higher court would decide.
Pending legislation also may change this. SB 10-187.

Humphrey...a case on what is a statutory employer

On April 1, 2010 the Colorado Court of Appeals decided the Humphrey case. It addressed the question of what is a statutory employer. An important purpose of a statutory employer is to impose responsibility often on the general contractor when a worker for a subcontractor is injured but that subcontractor has no workers compensation insurance. By statute the coverage is then to go through the general contractors insurance because it is deemed by statute the employer. But another impact of this is to prevent any further claims against the general contractor outside of workers compensation. So when the subcontactor does have workers comp and the employee does receive benefits but thinks there was negligence by the general and he tries to sue in a civil proceeding the general can assert it was a statutory employer and can't be sued even if it was negligent. In Humphrey a delivery person for Phil's burritos was hurt while in Whole Foods delivering and stocking Phil's burritos. He received workers compensation through Phil but then sued Whole Foods asserting they were negligent. Whole Foods said it was a statutory employer and can't be sued given he had workers compensation coverage. The court agreed. In a basic sense it is important to be aware that workers compensation law is set up to prevent an injured worker from suing his employer and yet also receiving workers compensation coverage. It is often considered to be an exclusive remedy. Clearly what is a statutory employer can turn on the facts. In Humphrey the court felt the delivery person was stocking and removing outdated burritos from Whole Foods shelves and active enough such that Whole Foods was a statutory employer. In any event it makes for interesting reading.

Work Injury Statistics in the USA

I have not yet found any statistics for last year but for prior years there are statistics on work injuries available at the national level. You can check it out at this link. I am not sure why Colorado only reports on fatal injuries to the US Bureau of Labor Statistics but the overall statistics show that for 2008 there were work injuries in 3.9% of the working population. This has been trending down over the last several years. Of those injuries about one-third or so result in time lost from work. Are these statistics accurate? I suspect it is much like auto accidents...only some are reported. Colorado has its last reported year as 2005 and is based on the actual filings of claims. In 2005 there were some 29000 lost time claims in Colorado. Does the poor economy affect anything? Probably so since the unemployed never have work injuries.

No Deal for Pinnacol This Year

The Denver Post is reporting that there will be no deal for Pinnacol this year. I've posted on Pinnacol numerous times here and more recently Pinnacol was trying to put together a deal for greater autonomy from state control. Pinnacol was originally set up by the state to help Colorado businesses obtain decent workers compensation coverage. Over the years it has worked itself into a major force in the workers compensation market. It handles the biggest share of work injury claims in this state. Given its size and revenues the state sought to obtain income to help with the state budget and also had increased interest in Pinnacol. In any event Pinnacol and the state ended any effort this year to work something out. Pinnacol wanted to pay for greater autonomy and that is out for now. I expect more on this next year. The story does not impact claimants except that some legislators have been unhappy with what they perceive is Pinnacol's power and unfair treatment of claimants. It can lead to law changes that benefit all claimants.
Update: View a more detailed story on this here.

Average Weekly Wage Desk Aid

The Division of Workers Compensation has what it calls a desk aid to help compute a claimant's average weekly wage. You can view it here. The subject of average weekly wage is an ongoing matter in Colorado. Even now the Supreme Court is to review a case soon (soon means this year).
The importance of the issue cannot be disregarded. Your wage calculations can play a very big role in your compensation benefits. A claimant wants it to be as high as possible and Respondents want it to be as low as possible. The reason is that it can increase your temporary and permanent benefits by a significant amount. As an example let us say you are making $10 an hour and get injured on the job. Does that mean the average wage is $400 for a 40 hour week? Not necessarily. Overtime does count. Having a second job may also count. Getting tips can also be counted (if timely reported to the IRS). Even health benefits from your job may be counted in many circumstances. The Desk Aid for wage calculations is actually more of a guide because a Judge has a great deal of discretion in calculating your average weekly wage. Do not blindly accept the figure provided to you as it may not be the only way to calculate benefits. Many insurers just take the last quarter's earnings (13 weeks) prior to the work injury and this may be way off. A judge may decide there is a different way to calculate it. Back to the example...if the $10 an hour employee worked overtime, or had tips or a second job or health coverage or even if there is another reasonable factor to consider the wage can go up. Even a figure just a few dollars higher can mean thousands more in temporary and permanent benefits. Always do your own calculations and your attorney should review the calculations considering the current caselaw and statutory law. This issue is a subject that is very current and often controversial so do pay attention to it. Look at my last post of March 20, 2010 where it is brought up in a proposed piece of legislation. See also this post where the wage calculation approach is to be reviewed by the Supreme Court.