Following aborted raid, lawmakers take up Pinnacol's future

Face The State Staff Report

A legislative inquiry into the operations of Pinnacol Assurance, the state’s largest provider of workers compensation insurance, could be a launching point for changes to the laws governing health coverage for injured workers.

As a political subdivision of the state, Pinnacol became the target of lawmakers' attention during this year's legislative session with a proposal to transfer $500 million of the company’s reserves to help balance the state general fund deficit. Business owners joined with the company in protest of the move, arguing the reserve fund belonged to insured businesses, not the state government. The proposal ultimately failed, but lawmakers instead passed Senate Bill 281, which created an interim committee charged with “clarifying the operation of Pinnacol Assurance as a political subdivision of the state” and “requiring performance audits of Pinnacol.”

Sen. Morgan Carroll, D-Aurora, chairs the interim committee, which holds its first meetings this week. Morgan works off session as an attorney who specializes in litigating workers compensation cases for patients. Carroll issued a press release last week calling for injured workers whose claims have been handled by Pinnacol to testify at this week’s meeting, prompting critics to question whether the interim committee may address issues outside its stated purpose.

“I believe that Morgan Carroll has a long term desire to change the way Colorado currently provides workers compensation,” said Sen. Ted Harvey, R-Highlands Ranch, who also sits on the committee. “I think it could be her desire to use this committee and her chairmanship to achieve that long-term goal. However, that is not the mandate of the legislation that was passed, and I think she would be going beyond the scope of the legislation if she tries to do that.”

Carroll defended the need for testimony from injured workers and maintains the scope of the committee is to “ensure that policyholders are getting the best deal, that injured workers are being treated appropriately and that...our insurer of last resort is solvent and stable,” she told Face The State in an e-mail. She added that Pinnacol and the business community have also been invited to participate in the hearings and are scheduled to testify. “Word needs to also get out to injured workers as well who don't have the same professional lobbying access,” she wrote.

As for her professional interests in the workers compensation system, Carroll says, “The committee is made up of policyholders, business owners, legislators, an injured worker, medical provider, Pinnacol appointees. All of us have some expertise or angle we add to the mix.”

Ken Ross, president and CEO of Pinnacol, said it is hard to know in advance how the hearings will proceed but he expects the “opportunity to have some of the misunderstandings about Pinnacol cleared up.”

“I think [Carroll] wants to hear from injured workers' experience and how we manage that claim,” Ross said. “I think it is important for the committee to hear from those people.”

Ross also recently told The Denver Post Pinnacol would be willing to pay state taxes and a lump sum of cash in exchange for greater autonomy. While Carroll told the Post it was too soon to discuss any deals, she did write the committee will be “narrowly focused on considering the future structure and function of Pinnacol.”

Legislative members of the Pinnacol Interim Committee:

Senator Morgan Carroll, Chair
Representative Bob Gardner
Representative Cheri Gerou
Senator Ted Harvey
Senator Mary Hodge
Representative Joe Miklosi
Senator Shawn Mitchell
Representative Sal Pace
Representative Su Ryden
Senator Lois Tochtrop

Non-Legislative Members:

Pinnacol's CEO – Ken Ross
Member of Pinnacol's board of directors – Gary Johnson, chairman
Division of Insurance Commissioner – Marcy Morrison
Policyholder insured by Pinnacol – Dr. Lynn Parry, former president, Colorado Medical Society
Injured worker – Mark Simon
Member of the public who has knowledge of the Colorado workers' compensation system – Pete Meersman, president and CEO, Colorado Restaurant Association, and former member of Pinnacol's board of directors