PROPOSED STATEMENT OF BASIS AND PURPOSE FOR
AMENDMENTS TO THE WORKERS’ COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

BASIS:  §8-47-107, C.R.S. provides the Director of the Division of Workers’ Compensation with authority to adopt and amend proper rules and regulations to govern the proceedings and hearings of the Division. 

PURPOSE:  To revise language in the rule to comply with Senate Bill 07-258 that, in part, addresses the issue of lump sum payments.

The rule amendments address the following subjects:

Rule 5-10             Lump Sum Payments of an Award
Increases the aggregate of all lump sums awarded; provides guidance on calculation and payment of benefits; provides guidance on how to request and receive lump sums for pro se and represented claimants.

Pursuant to §24-4-103(4)(b), C.R.S., the Director finds that: 1) there is a demonstrated need for the rule amendments; 2) the proper statutory authority exists for this regulation; 3) to the extent practicable, the rules are clearly stated so that their meaning will be understood by any party required to comply with the regulation; 4) the rules do not conflict with other provisions of law; and 5) the duplicating or overlapping of the regulation is explained by the agency proposing the rules.

Bob Summers							6/06/2007
Bob Summers							Date
Director, Division of Workers’ Compensation         

REGULATORY ANALYSIS
FOR AMENDMENTS TO RULE 5-10 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, self-insured employers, insurance carriers, third party administrators and employers.

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

These rules revise, update or are additions to the current rules of procedure.  The main purpose is to update and clarify procedures.

Amendments clarify that the insurer shall provide a lump sum payment of $10,000.00 to the injured worker upon written request for both scheduled and non-scheduled awards.  In addition, the amendment increases the aggregate of all lump sums granted to $60,000.  Upon request from a represented claimant, requires the insurer to review, calculate and pay all lump sum requests within 10 days of receipt.  Requires the insurer to file with the Division calculation and proof of payment within those same 10 days.  The Division will review, calculate and issue orders on the lump sum requests by unrepresented claimants.  The update and amendment to the rules should increase efficiency and assist persons in implementing required actions.   

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

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

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

Amendments to the rules are required due to a legislative change.  These rule amendments will conform and provide guidance to effectuate a change in the statute.  Inaction will result in the rules no longer conforming to the statute. This amendment is for clarification purposes only and will have no cost impact on the system as a whole.  Similarly, this is not substantive and will clarify responsibilities regarding the payment of lump sums.   These rule amendments clarify procedures and should therefore decrease uncertainty and increase efficiency in the payment of lump sums.  

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 proposed rules that were seriously considered by the agency and the reasons they were rejected in favor of the adopted rules.

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