In this Capitol Report:
Labor & Employment Council Votes to Oppose HB 1207, SB 87
The Colorado Chamber’s Labor and Employment voted to oppose two bills during its Wednesday meeting.
The first bill is House Bill 1207, which relates to the overpayment of workers compensation benefits. The bill limits the definition of “overpayments” of workers’ compensation benefits to include only benefits paid as a result of fraud or duplicate benefits that result from offsets that reduce disability or death benefits paid to a claimant. The bill clarifies that this limit does not prevent an insurance carrier from receiving a credit against permanent disability benefits for temporary disability benefits paid beyond the date of maximum medical improvement.
HB 1207 also prohibits the director of the division of workers’ compensation or an administrative law judge from reopening an award of benefits paid to a claimant due to an overpayment except in limited, specific circumstances.
The Colorado Chamber is concerned that this bill could lead to an inability to recover benefits that have been overpaid to claimants. It also conflicts with years of longstanding prior legislation and processes regarding resolving workers compensation overpayments.
HB 1207 is scheduled to be heard in the House Business Affairs and Labor Committee on April 1, 2021.
The Council also voted to oppose Senate Bill 87, relating to agricultural workers. The bill creates a significant number of new regulations on the agricultural industry, allowing workers to unionize and creating new requirements regarding overtime, compensation, and working conditions – among other things.
The bill passed the Senate Committee on Business Labor and Technology this week and was sent to Senate Appropriations.
Audit of CDLE Reveals Unemployment Fund Management Issues
The State Auditor’s Office recently released its annual Statewide Financial Audit for the fiscal year ending on June 30, 2020 and identified major management issues for the Colorado Department of Labor and Employment. The Department administers unemployment claims for the state and has seen an unprecedented volume of claims due to the pandemic.
The state’s unemployment fund received the lowest possible rating by the state auditor. The office reported major deficiencies in reporting and documentation of the unemployment fund.
CDLE was unable to report how much the department has lost to unemployment fraud, which has been a major issue since the start of the pandemic. Agency officials were also unable to accurately determine what amount CDLE has overpaid in claims – however, they originally estimated $2.1 billion without documentation.
“During our Fiscal Year 2020 audit, we identified several significant problems with the Department’s accounting related to UI benefit payment,” the report reads. “Specifically, we found that the Department failed to consider the impact of a 1,500 percent increase in UI claims during Fiscal Year 2020 resulting from the COVID-19 pandemic when performing its fiscal year-end accounting processes and recording accounting activity. As a result, the Department’s accounting records were significantly understated as of the time of our audit. After we inquired about the accounting omissions, Department staff submitted three transactions totaling approximately $2.1 billion to the OSC to record and adjust liabilities, receivables, federal revenue, and expenditures related to UI benefit payments in the Unemployment Insurance Fund.”
The problems identified in the audit were:
- Failure to record a payable for Fiscal Year 2020 claims due as of June 20, 2020, but paid after year end.
- Failure to record receivables and payables for unadjudicated claims.
- Failure to record activity related to uncollected overpayments.
- Calculation error in allowance account.
- Failure to record receivable for identified fraudulent overpayments.
To read the March 2021 State Auditor report, click here.
For additional reading, see the Colorado Sun and The Denver Post
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