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

The proposed rule amendments concern the premium surcharge rates paid by carriers and self-insured employers.  The amendment will also reflect the current year of review. 

The amendments will reduce the total surcharge.  A lower surcharge may result in a decrease in premium, but due to the various factors that come into play it may or may not impact the premium charged to a particular employer.          

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

The proposed rule will result in less revenue coming into the Workers’ Compensation Cash Fund.  Reducing the revenue so that these funds are administered in a pay as you go manner is required by SB 09-037. No net impact on costs is anticipated as a result of the rule changes.  

4.	Comparison of the probable costs and benefits of enacting the proposed 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 proposed decrease in the special funds premium surcharge rate is consistent with statutory requirements.  The proposed surcharge level should not impact the ability of the Division to function or the efficiency of the workers’ compensation system.  Not taking this action would result in noncompliance with Senate Bill 09-037.

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

There are no known less costly or less intrusive means.   

6.	Description of any alternative methods for achieving the purpose of the proposed rules that were seriously considered by the agency.

Because of the nature of these proposed 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