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Dan Pilcher
CACI Senior Vice President
& Chief Operating Officer
Phone: 303.866.9600
E-Mail:
dpilcher@cochamber.com
Friday, May 22, 2009
CACI Asks Governor to Veto Pinnacol Bill, SB-281
SB-281 calls for two things: a “performance
audit” this year of Pinnacol Assurance and a
16-member legislative interim committee to study
Pinnacol this summer and fall.
The performance audit--to be conducted by the
State Auditor but to be paid for by Pinnacol--will
look at “executive compensation, premium rate
structure, known loss reserves, incurred but not
reported losses, and injured workers’ claims
experience.” The State Auditor is given the
authority to conduct more performance audits in
the future, and Pinnacol will be required to pay
for them.
The legislative interim committee is directed to
examine “the operation of Pinnacol Assurance
including, but not limited to both the
feasibility of the continued operation and the
public policy implications of Pinnacol Assurance
as a division of state government or the
feasibility and public policy implications of
selling Pinnacol Assurance to a willing
third-party buyer.”
Reconciling differences between the House and
the Senate, the joint conference committee
dropped the language—especially opposed by CACI--that
would have empowered the legislative interim
committee to open up the entire workers’ comp
system and statues to examination.
Here is CACI’s letter to the Governor asking him
to veto the bill:
May 18, 2009
The Honorable Bill Ritter, Jr.
Governor of Colorado
136 State Capitol
200 East Colfax
Denver, CO 80203
Re:
SB 09-281, Concerning Auditing and Review of
Pinnacol Assurance
On behalf of the Board of Directors of the
Colorado Association of Commerce & Industry (CACI),
I respectfully request you to veto Senate Bill
09-281. This bill impacts Pinnacol Assurance, a
mutual insurance company which has been a
national model of excellence in providing
workers’ compensation insurance to Colorado
businesses. Even as amended, SB 09-281 concerns
CACI due to the potential for future legislation
resulting from the interim study group that
could adversely affect Pinnacol, their
policyholders and injured workers. We ask for
your consideration of these and the following
concerns when determining whether this bill
should become law:
Background:
SB 09-281 requires a financial and performance
audit of Pinnacol Assurance to review executive
compensation, rate structure, known loss
reserves, incurred but not reported losses and
injured workers’ claims experience. The bill
also establishes a 16-member interim committee
charged with reviewing and potentially
recommending changes to Pinnacol’s operations.
Mission and Success of Pinnacol:
Pursuant to the direction of the 2002
legislation, Pinnacol operates as a business on
behalf of its policyholders, and its mission is
to provide workers compensation insurance for
businesses throughout the state of Colorado.
Pinnacol has succeeded in that goal and is one
of the preferred providers of workers’
compensation insurance statewide. Pinnacol
insures 58,000 businesses, some of which include
high-risk occupations that cannot be insured
through other insurance carriers. While many
insurance companies have seen drastic losses and
have sought taxpayer bailouts, Pinnacol has
maintained sound management and prudent business
practices that have allowed it to remain
financially sound. Pinnacol has also provided
businesses very affordable and competitive
premiums and top-notch service, while being able
to endure any emergencies or financial crises
that it may face.
Pinnacol has been a good member of CACI for many
years, and we believe that legislation pursued
through SB 281, and SB 273 which proposed to
raid $500 million in Pinnacol’s reserves, have
been very shortsighted and ill-advised. During
the legislative process when both anti-Pinnacol
bills were proposed, CACI reached out to our
members through our Grassroots program to get a
sense for our members’ position on these bills.
Over 300 CACI members contacted their
specific legislator within their district and
told those legislators to “leave Pinnacol
alone!” These businesses voiced their
strong opposition to these bills because clearly
they are concerned with the potential impact to
Pinnacol, which ultimately affects their
workers’ compensation coverage and the service
they receive.
The ramifications of this legislation and any
future efforts to change Pinnacol’s operations
are multi-faceted, and could result in higher
workers’ compensation costs, instability in the
marketplace and uncertainty for injured workers
and their families.
Based on the reasons provided above, CACI
strongly encourages a veto of this legislation,
and we sincerely appreciate your consideration
of our request.
Yours truly,
Chuck Berry
President
Colorado Association of Commerce and Industry
Veto of SB-244, the Autism Bill, Requested by
CACI
Sitting on the Governor’s desk is SB-244, the
bill that will mandate that group
health-insurance polices, which are regulated by
the State, to provide coverage for applied
behavior analysis for autism spectrum disorders
(ASD). In the Senate, the bill was sponsored by
Senate President Brandon Shaffer (D-Longmont).
The House sponsor was Representative Diane
Primavera (D-Broomfield). Here is CACI’s letter
to the Governor requesting his veto:
May 14, 2009
The Honorable Bill Ritter, Jr.
Governor of Colorado
136 State Capitol
200 East Colfax
Denver, CO 80203
Re:
SB 09-244, Concerning a Mandate Imposed
on Business to Provide Additional Benefits to
Individuals with Autism
Dear Governor Ritter:
On behalf of the Board of Directors of the
Colorado Association of Commerce & Industry (CACI),
I respectfully request you to veto Senate Bill
09-244, which imposes a burdensome mandate on
Colorado businesses. While the goal of
increasing coverage for those with autism
remains important, we ask for your consideration
of the concerns outlined below in determining
whether this legislation should become law.
Background:
SB 09-244 forces businesses to provide
unprecedented health-insurance coverage for
their workers whose children have autism. The
bill would mandate that group health-insurance
polices that are regulated by the State would
have to provide coverage for applied behavior
analysis for autism spectrum disorders (ASD).
Incredibly, the bill exempts State Government
workers, higher-educational institutions’
workers and children insured under the
State-Federal health-insurance plan known as CHP+.
Increased Costs Created Through SB 09-244:
Throughout the legislative process, CACI opposed
SB 09-244 due to the increased costs that
employers will be forced to pay if this bill is
enacted into law. We oppose efforts by the
State to continue to enact costly mandated
health care coverage which will be borne by
employers who are currently struggling with
rising health care costs. These increased costs
will be passed along to the employees or will
force employers to reduce or completely
eliminate coverage. Our opposition is joined by
several others including local Chambers of
Commerce, the Colorado Hospital Association, the
Colorado Association of Health Plans, the
National Federation of Independent Business, and
the Colorado State Association of Health
Underwriters.
The proponents of SB 09-244 have stated that
increased costs on employers would be
negligible; however, they also testified in
committee that one in every 150 children will be
diagnosed with autism spectrum disorder. Based
on Colorado’s birth rate of 71,000 live births
each year, the bill will necessitate additional
coverage for 473 children up to age 19 each
year. Using a conservative professional
reimbursement rate of $65 per hour, the
increased costs will be significant, even if
coverage is capped at $34,000 for children up to
age 8 and $12,000 up to age 19. It is important
to note that SB 244 does not include state
employees or the poorest and most vulnerable
populations (Medicaid and CHP). On the
House floor, an amendment that would have
included Medicaid recipients was deemed to not
fit under the title. However, the bill as
introduced did in fact include Medicaid
recipients. We believe that these exclusions
are due to the likelihood that the State budget
writers did not want to burden the State Budget
with the increased costs imposed by SB 09-244.
When the Legislative Council Fiscal Staff issued
their fiscal note which included autism coverage
for Medicaid recipients and state employees, the
cost to the State was $26.3 million for
2010-11, and increased to $57 million for
2011-12.
We would strenuously submit that businesses
should not shoulder the burden of increased
costs that the General Assembly itself has
determined that it cannot afford. If a mandate
of treatment for autism is necessary for
children of private sector employees, then why
wouldn’t this coverage be just as critical for
autistic children of state employees and
Medicaid recipients?
Current Autism Treatments:
Currently, many health plans cover medically
necessary autism treatments, often including
physical, occupational and speech therapies, and
pharmaceutical treatments. Additionally, most
health plans cover some type of early
intervention and evaluation of children with
autism behavior disorder. As passed, SB 244
requires coverage for a method of treatment
known as Applied Behavioral Analysis (ABA),
which is not the only recommended autism
treatment, much less the preferred autism
treatment. SB 244 also creates a slippery slope
in designating autism, specifically ABA therapy,
as a “super disease” for mandated coverage.
This type of designation establishes a precedent
for mandated coverage on other diseases or
syndromes such as Alzheimer’s, Leukemia, Marphan
Syndrome, Asthma, and Lupus, thereby increasing
the potential for even higher health care costs.
In closing, CACI must emphasize that our group
was not included in various discussions that led
to a so-called compromise on the original bill.
Initially, the proponents of SB 09-244 assured
various business interests that they would only
bring a bill forward if a consensus was reached
on the language. However, SB 09-244 when
introduced failed to include input from health
plans or business organizations, therefore no
consensus was reached. During the final days of
Session, a compromise was reached on the bill
with specific health care providers, however,
business organizations and other interested
parties were not part of that compromise nor
were they asked to participate in that process.
Therefore, it is important to clarify that CACI
does not support the amended version of SB
09-244 based on the same reasons discussed in
this letter.
For these reasons, CACI urges you to veto this
legislation. We sincerely appreciate your
consideration of our request.
Yours truly,
Chuck Berry
President
Colorado Association of Commerce and Industry
For More Information . . .
CACI members with questions about SB-281 and
SB-244 and CACI’s positions should contact
Chuck Berry, CACI President, at 303.866.9652
or e-mail him at
cberry@COchamber.com |
