It appears the fifth time won’t be the charm for an effort to privatize the quasi-public workers’ compensation insurance division — at least not if House Democratic leadership has its way.
Rep. Matt Soper, R-Delta, last week told Colorado Politics he plans to roll out a bill on Tuesday that seeks to privatize Pinnacol Assurance and use the $305 million the change would provide to pay for an Office of Just Transitions plan for energy workers, as well as money for controlled maintenance. Soper said he had buy-in from Pinnacol, which provides workers’ compensation insurance to anyone in Colorado who needs it.
But while the so-called "insurer of last resort" may be on board, House Speaker Alec Garnett, D-Denver, and Majority Leader Daneya Esgar, D-Pueblo, are not. Garnett said in a Monday media availability that discussions around such a move often pop up as “one of the last tools in the toolkit when we're facing really challenging, catastrophic budget years.” Both he and Esgar noted the state is on much more stable ground financially this year than last year as Colorado rebounds from the COVID-19 pandemic.
“The time doesn't really feel right to me because of how the economic conditions have changed over the last two and a half fiscal quarters,” Garnett said.
“We cut $3.3 billion out of a budget last year,” she said. “We're not in that same place this year and I don't think it's as urgent of a conversation for such a drastic move right now.”
For Soper, the urgency comes from the need to deliver funds for Just Transitions. While he was a “no” vote on the legislation that created the office, he said watching closures of coal mines and power plants in his community “all being sped up” showed him there’s “a lot of need right now.”
“These are two very important functions of government, helping individuals in communities through no fault of their own, seeing good-paying jobs close. It’s the state’s obligation to help. I don’t support closing coal mines or power plants, but I do support individuals who wake up one day and don’t have a job. We likewise have a duty to maintain the things we own as state government.”
Pinnacol has been the state’s insurer of last resort for more than 100 years, beginning in 1915, and currently provides that coverage to 56,000 member companies in Colorado.
The company was a state agency until 2002, when it became a political subdivision of the state, meaning the governor appoints the board, its employees are members of the state’s pension plan, the company remains the insurer of last resort and it offers workers’ compensation insurance only in Colorado. On the private side, Pinnacol is required to operate like a mutual insurance company. Where it differs is that policyholders don’t own or control the company.
While Garnett and Esgar threw cold water on the proposal, the bill could have a powerful ally in the governor’s mansion, or at least that’s what Soper believes. He noted Gov. Jared Polis’ 2021-22 budget proposal did not include a request for either controlled maintenance or Just Transition funds, hoping to rely on the money coming from Pinnacol.
But privatization could be a problem for Polis with unions, who said they were firmly opposed to the bill.
Polis spokesman Conor Cahill told Colorado Politics last week that "Governor Polis believes discussions about reforming Pinnacol in ways that will better serve employees and businesses in Colorado are worth having, but the Governor has not made any commitments on any specific legislation."