DENVER • In an effort to find money to help energy industry workers transition to new careers, State Rep. Matt Soper, R-Delta, has resurrected an idea that has been attempted four times: privatize the quasi-public workers’ compensation insurance division, Pinnacol Assurance.

Soper plans to roll out a bill next week that he says has the buy-in from Pinnacol, known as the “insurer of last resort” that provides workers’ compensation insurance to anyone in Colorado who needs it.

“This should be one of the best bills of the session,” Soper said this week. The change would provide $305 million to pay for a Just Transitions plan for energy workers as well as money for controlled maintenance.

Transitioning the company to private will not be easy, but the plan has gotten backing from some of those who have been most opposed to privatization in the past.

This is far from the first time that Pinnacol has been targeted for privatization. Previous attempts date back a decade or more, including efforts pushed by Pinnacol.

The most recent was in 2012, when then-Gov. John Hickenlooper set up a task force to study the move. The majority of the group gave the proposal a thumbs-down.

Hickenlooper would have used the money paid to the state, about $350 million in stock, to fund economic development and education — the state was coming out of the 2008 Great Recession with a $1 billion debt to K-12 — but questions about the impact on rates and opposition from business groups doomed the idea, according to the Denver Business Journal. Pinnacol wasn’t opposed to privatization, then or now. The company had made a similar proposal a year earlier.

Pinnacol has been the state’s insurer of last resort for more than 100 years, beginning in 1915, and 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. However, where it differs is that policyholders don’t own or control the company.

Soper’s 52-page bill draft has many moving parts. One of the biggest — and where the bill may run into some roadblocks — is removing Pinnacol and its 650 employees from the state’s pension plan. Pinnacol would have to pay the Public Employees’ Retirement Association about $234 million for its share of its employees’ liabilities in PERA’s state division, according to Edie Sonn, Pinnacol’s vice president for communications and public affairs. Pinnacol’s employees represent about 1% of the membership and of its liabilities in the state division.

Soper said Pinnacol is sitting on a $1 billion reserve that keeps its credit rating high. A portion of that reserve, however, would be used to buy out the company’s obligations to PERA, Soper said. “PERA won’t lose; they’ll have less lives to cover and they’ll still have the cash.”

PERA’s board hasn’t taken a position on the bill and won’t until after it is introduced.

Ron Baker, PERA’s executive director, said that the legislation allowing Pinnacol to disaffiliate from the state division would use the same calculation used for local government. That comes out of Senate Bill 18-200, which allowed Memorial Hospital in Colorado Springs, which is in the local government division, to disaffiliate from PERA, although the hospital eventually decided not to do that.

There’s also the possibility of additional costs over and above the liabilities, which was allowed under SB 200 for local governments but doesn’t exist in current law for the state division.

Baker said, however, that the PERA board might not support a bill that doesn’t match what they do with other employers.

Baker pointed out that SB 200 set up a process to deal with disaffiliation with PERA, including costs. The idea of allowing a PERA employer to disaffiliate is not one that PERA is crazy about, Baker indicated.

“If the General Assembly were to start pulling employers out of PERA, that would be heartburn for public employment, which we believe has a value,” he said.

Privatizing Pinnacol, known as divestment or disaffiliation, means it also might no longer be the insurer of last resort.

The company must insure any company in Colorado that applies for workers’ compensation insurance.

The bill requires the Commissioner of Insurance to issue a request for proposal that would allow other companies to bid for the contract, to begin in 2025. However, Sonn said the company would definitely bid for that contract and wants to retain the title.

“We do a pretty good job,” she said. “We believe having a single carrier of last resort is in the best interest, not only for the business but for their employees. When you have one insurer who specializes, it helps ensure when someone gets hurt on the job, they get the care they need.”

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