CO Bill Aims to Safeguard Injured Workers from Uninsured Employers


By Angela Underwood

Denver, CO ( – A fund to protect the injured worker from uninsured employers passed last week in Colorado.

Rep. Tracy Kraft-Tharp (D-Arvada and Westminster) spoke to before hitting the legislative floor that morning on the final day of the legislative session to see whether or not HB 1119 would be passed by her peers.

It did, 30-5.

Rep. Kraft-Tharp, who chairs the Business Affairs and Labor Committee and the Legislative Audit Committee, said while 20 other states have similar laws and programs to protect the injured worker, Colorado’s bill is unique. The state passed a 2005 law that makes it mandatory that uninsured employers without workers’ comp are issued a violation. They can be fined anywhere from $250 to $500 dollars a day.

“Sometimes it can take the Division of Workers’ Comp years to discover that employers don’t have workers’ comp,” she said noting some cumulative fines have been as high as $900,000. Rep. Kraft-Tharp was unaware of these practices until she saw a television report about a small business that accidentally signed on the wrong line, possibly exempting them from carrying insurance.

Rep. Kraft-Tharp said there was a case when one business owner claimed she purchased liability insurance thinking it was workers’ comp. “So we introduced the bill this year saying the agency would have discretion [to review] under certain circumstances,” she said, adding an important question was left; how was Colorado going to take care of the injured worker employed by uninsured businesses?  

“I have been working with the business and labor community since last summer, and we put together a program that when you fine the bad guys, you then use that money to put together a workers’ fund,” she said, noting the difference between Colorado and the other 20 states with similar programs is that “they take funds from both the bad guys and people who are complying with the law.”

Opposition did exist, with the Workers’ Compensation Coalition and People of Liberty. “We do have opposition to the bill and had a struggle to get it through, which is why we have been working closely with the people trying to oppose it and solve their problem but we have not been able to do that,” she said.

The Workers’ Compensation Coalition was concerned it would affect the Subsequent Injury Fund which is money that is already applied to the general fund in the budget. “We have not been able to resolve that and have agreed to disagree,” she said, adding, “That money is better used to help workers with their medical needs.”

She said the People of Liberty opposed the bill since they believed an injured worker should utilize the judicial system.

Practicing principal Cliff Eley of Denver’s Eley Law Firm, said he had heard about the bill and was hoping to see it pass. “Generally, when someone does not have insurance, they don’t have any other assets either. So (while) you can get an order for them to pay, and have that turn into judgement, and there are no assets there then there really is no point in pursuing it,” said Eley, who is a founding member of the Workers’ Compensation Education Association, Colorado’s leading association of claimant attorneys.

After practicing for 25 years in workers’ compensation, Eley said having no fund for uninsured workers has been a problem for a long time. “They can bankrupt their way out of it if they (are) ordered to take benefits,” he said. And that is exactly what “bad actors” do, according to Rep. Kraft-Tharp. “They get caught, close up and claim bankruptcy and shut down to only open up down the street.”

Eley said he is not very sympathetic to employers that go without insurance because when people are injured they are left vulnerable, often unable to pay their bills. “I am glad there is a fund to back it up,” he said.

Eley also said there’s a possibility it could encourage employers not to pay their insurance, if the fund will pay it anyway. But he noted, “that’s unlikely since there are penalties involved.”

“I am all in favor of this bill and I think it is long overdue, other states have it and I am glad to hear that Colorado is doing it,” said Eley, who authors a workers’ comp blog. “I have had more than one case where I got everything but we walked away with no money. It is terrible.”

“I call it the perfect bill,” Rep. Kraft-Tharp said. “It helps small business survive and at the same time it helps workers, what could be better than that?”

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