If Your Boss Avoids Workers’ Comp, The State Wants To Help You Get Your Money

David Zalubowski/AP
Workers completing the facades on a row of condominiums in the Denver area.

Colorado is launching a new fund that will cover medical expenses for people who get hurt while working for a company that doesn't have workers' compensation insurance.

While state law requires every employer to enroll in workers' comp, some try to skirt the system. In the past, if one of those company's employees was injured on the job, that worker would often get stuck with the bill for their medical costs.

"A lot of them end up with nothing. The employer disappears and doesn't pay any benefits," said David Gallivan, the Department of Labor's liaison to the new Colorado Uninsured Employer Fund.

The fund was approved by state lawmakers in 2017 and has spent the past few years getting up and running. It will open for claims in the new year, but only injuries sustained on or after Jan. 1, 2020, will qualify.

"This really was the most significant reform in worker's compensation in the past, gosh, 30 years now," said Jackleen Jackson at the state's Division of Workers' Compensation.

However, the fund likely won't cover everyone who qualifies for help this year. It currently has $1.6 million in the bank, raised primarily from fines on employers caught without workers' comp insurance. That amount isn't enough to pay medical costs if the fund gets as many claims as the department expects: an average of 95 people a year.

In that situation, Gallivan says the fund will have to stop accepting new claims for a while, although those sent away will be at the front of the line when the process reopens.

Gallivan does expect the fund to bring in more money in the future thanks to a change in how the state penalizes companies without insurance.

Previously, the minimum fine on scofflaw employers was set in stone. Regulators couldn't charge them anything less. That led to a lot of companies declaring bankruptcy and never paying anything, Gallivan said.

"Now we can work with employers to figure out how much they can pay, and to get a penalty amount that will actually result in some revenue," Gallivan said. "So the overall penalty imposed will be lower, but the revenue will be substantially higher."

For the time being, the fund's limited money means it will only cover medical costs. However, the board running it hopes to eventually expand to other benefits, like temporary and permanent disability.