REGULATORY ANALYSIS
FOR AMENDMENTS TO RULE 2-5
OF THE WORKERS' COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

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

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 rule, economic or otherwise, upon the classes of affected persons.

The rule amendments concern the premium surcharge rates paid by carriers and self-insured employers. 

The amendments will lower the total surcharge. The amendments will redistribute the premium surcharge rates in order to provide sufficient funding for the Workers’ Compensation Cash Fund while decreasing the amount going into the Special Funds.  This will result in sufficient funding while lowering the amount of surcharge paid by insurers and self-insured employers.         

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

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

4.	Comparison of the probable costs and benefits of enacting the rules to the probable costs and benefits of inaction. 

The Director has been provided with the authority to annually review and adjust surcharge rates based on appropriations made for direct and indirect costs of the administration of the workers’ compensation system. The decrease in the special funds premium surcharge rate will be partially offset by the increase in the workers’ compensation cash fund premium surcharge rate so the total surcharge will decrease slightly, providing some cost savings.  The efficiency of the workers’ compensation system will also be maintained.  Not taking this action would result in insufficient revenue to fund the operations of the Division of Workers’ Compensation.

5.	Determination of whether there are less costly or less intrusive methods for achieving the purpose of the rules.

There are no known less costly or less intrusive means.   
6.	Description of any alternative methods for achieving the purpose of the rules that were seriously considered by the agency.

Because of the nature of these rule amendments 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