Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

HB 12-1033 Workers Comp Admin Audit Fines Rep. Swalm & Sen. Newell Staff Name: Riki Parikh What the Bill Does: Colorado law directs the director of the Division of Workers Compensation -- a division within the Colorado Department of Labor & Employment -- to impose a fine on any insurer who knowingly and repeatedly violates the Workers Compensation Act of Colorado.1 Among the provisions is a reporting requirement: insurers or self-insured employers must report an injury, occupational disease, or fatality within 10 days of the injury.2 Failure to report within that period could result in a fine of as much as $1,000 per day.3 HB 12-1033 specifies that the director may not impose an administrative fine on an insurer or employer for late reporting of an injury, occupational disease, or fatality when the late reporting resulted from the insurer/employer not having notice or knowledge of the injury/disease/fatality in sufficient time to comply with the reporting period. But the director may impose a fine if he/she finds that the late reporting constituted a knowing and repeated pattern of noncompliance with the reporting requirements and was not caused by a lack of notice or knowledge of the injury. Colorado Context: Currently, an employer has ten days to report an injury to the Division of Workers Compensation. If an employer fails to report, the insurance company is assessed a fine. If the division conducts an audit, a second fine is imposed for that same offense.4 This bill would remove the second fine. The revenue generated from these fines is split between the General Fund (75 percent) and the Workers Compensation Fund (25 percent).5

1 2

C.R.S. 8-43-101 et. seq. C.R.S. 8-43-101(1). 3 Id. 4 Testimony from Patrick Boyle (Property Casualty Insurance Association of America), House Economic and Business Development Committee, Jan. 19, 2012. 5 C.R.S. 8-43-304(1.5)(b).

DRAFT 2/12/12 4:51 PM

For a complete list of fact sheets, visit www.mikejohnston.org/in-thelegislature.

Bill Provisions: Adds to the Colorado Workers Compensation Act a provision that bars the director of the Division of Workers Compensation from imposing a fine for failure to report an injury within ten days of the injury if the employer or insurance company does not have notice or knowledge of the injury. However, a fine may be imposed if the failure to report constitutes a knowing and repeated pattern of noncompliance and not a lack of notice or knowledge. Takes effect either 90 days after adjournment or, if a referendum is put to the voters during the 2012 general election, upon the approval of Colorado voters. Fiscal Impact: The Colorado Legislative Council estimates the bill will reduce revenue from fines by less than $10,000 in FY 2012-13 and future years. Seventy-five percent of workers compensation fine revenue is credited to the General Fund and the remaining 25 percent is credited the Workers Compensation Cash Fund. As a result, the impact is estimated at less than $7,500 to the General Fund and less than $2,500 to the Workers s Compensation Cash Fund.6

Clare Pramuk, Fiscal Note: HB 12-1033 (Jan. 30, 2012), http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/218B7C82071289AD87257981007E0839?Open&file=HB1033_r1. pdf.

DRAFT 2/12/12 4:51 PM

For a complete list of fact sheets, visit www.mikejohnston.org/in-thelegislature.