REGULATORY ANALYSIS
FOR PROPOSED REPEAL AND READOPTION
OF THE WORKERS' COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

1.	Description of classes of persons who will be affected by the adopted rule, including classes that will bear the costs of the adopted rule and classes that will benefit from the adopted rule.

The classes of persons affected by the rules are all persons and entities involved in the Colorado Workers’ Compensation system.  This includes, but is not limited to, injured workers, health care providers, insurance carriers, third party administrators and employers.

2.	Description of the probable quantitative and qualitative impact of the adopted rule, economic or otherwise, upon the classes affected of persons.

This rule amendment establishes a uniform settlement agreement that must be utilized when settling all or part of a workers’ compensation claim.  Establishing such a uniform agreement should simplify and standardize the process for settling claims and receiving the statutorily required approval of the settlement agreement.  This should save system costs since parties will not have to draft a settlement agreement from scratch.        

3.	Probable costs to the agency and other agencies of the implementation and enforcement of the adopted rule and any anticipated effect on state revenues.

No impact on costs or revenues is anticipated as a result of the rule change.  

4.	Comparison of the probable costs and benefits of the adopted rule to the probable costs and benefits of inaction. 

Under the current process, when parties are settling a workers’ compensation claim they often include terms and conditions that are outside the Workers’ Compensation Act.  Statute requires that the settlement be reviewed with the injured worker (this requirement can be waived if the injured worker has legal counsel) and approved by an Administrative Law Judge or the Director.  It is problematic for an Administrative Law Judge or the Director to attempt to advise an injured worker on issues that are outside the Workers’ Compensation Act.  Also, the legal effect of an Administrative Law Judge or the Director approving a settlement agreement that contains terms or conditions outside their jurisdiction is not known and may be misleading to the parties.

Adoption of this rule will establish a uniform and standardized process for reviewing and approving settlement agreements, while still allowing some flexibility depending on the facts of the specific case.  Taking no action will result in the current process of reviewing and approving settlement agreements that are vastly different and include many different terms and conditions which may be outside the scope of the Workers’ Compensation Act.     
5.	Determination of whether there are less costly or less intrusive methods for achieving the purpose of the adopted rule.

There are no known less costly or less intrusive means.  Establishing a uniform settlement agreement and process should result in efficiencies for all parties.  

6.	Description of any alternative methods for achieving the purpose of the adopted rule that were seriously considered by the agency and the reasons they were rejected in favor of the adopted rule.

No alternative methods were seriously considered.   

Copies of the Notice of Public Hearing were provided to the:

Colorado Association of School Boards, 
Colorado Counties, Inc.
Colorado Municipal League
Special District Association of Colorado
Colorado Health and Hospital Association
Colorado Association of Commerce and Industry
Mountain States Employers Council
Colorado Self-Insurers Association