Collaboration Solves Broken Rebuttable Presumption Law for Colorado Firefighters




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Collaboration Solves Broken Rebuttable Presumption Law for Colorado Firefighters

How do you know when the Workers’ Compensation firefighters’ presumption is broken?

  • Journalists discuss individual WC cancer cases on TV, in print, and online
  • It takes more than a year—or even two years—before a decision is made whether to accept or deny a claim
  • Firefighters pass away before being awarded benefits
  • Cancer cases go before the state Supreme Court

On May 3, 2017, Colorado Governor John Hickenlooper signed into law an opportunity for fire operations to voluntarily opt in to an accident-type policy, which is triggered upon a diagnosis of one of the five statutorily-covered cancers, thus getting out of the state’s rebuttable workers’ compensation presumption of cancer for firefighters.

What happened that led to the new opt-in voluntary program?

In May 2007, Colorado passed a bill that placed a rebuttable workers’ compensation presumption on five cancers. Under this law, the burden of proof moved from the firefighter having to prove the cancer was job-related to the employer now having to prove, with a preponderance of evidence, that the cancer was not job-related.

What was it that proved problematic for Colorado’s 2007 legislation?

Prior to the passage of the presumption law, a plaintiff employee would have spent months preparing their case by gathering evidence. After the law was passed, employers would have to spend a similar amount of time and effort to conduct an investigation of their own. This involved an invasive, time-consuming inquiry into exposures such as:

  • Conditions in the claimant’s current and previous places of residence
  • Environmental conditions at the claimant’s current and past places of residence
  • Hobbies
  • Genetics and family history
  • Lifestyle (smoking, dietary preferences, etc.)
  • Prior medical history

This scrutiny can be considered intrusive, but is necessary to make a reasonable determination whether the claimant has been exposed to known carcinogens linked to the five types of cancers covered in the statute outside of the workplace.

In Colorado, the workers’ compensation statute says the claims adjuster has only twenty days to determine the compensability of a claim or they must file a Tentative Notice of Contest (TNOC), subject to further investigation. An investigation like this simply cannot be completed in 20 days due to the amount of records that need to be obtained and thoroughly reviewed; therefore a TNOC is automatically sent when these claims are received. Many employees react to these notices with both shock and confusion, assuming the letter represents a flat denial. They respond by immediately seeking legal representation.

Now, here we are nine years later with many cases involving an attorney and taking six months to several years for investigation, and a high percentage going to court. There were three cases that finally settled after two years at the state Supreme Court. The rulings were widely seen to be in favor of an employer’s right to rebut the presumption with evidence that the cancer was not job-related. Everyone agreed that there had to be a better way to resolve this difficult issue. Handling the majority of an estimated 180 cancer claims over a nine year period in a hearing room has not worked for anyone.

In 2011, as WC rates and loss experience continued to compound and cause premiums to soar, a collaborative effort had already begun with the Colorado State Fire Chiefs (CSFC) and the Colorado Professional Fire Fighters (CPFF) agreeing to open a dialogue. In their conversations, they began to look for other ways to cover disease than through workers’ compensation. In 2013 firefighters were looking at a new presumption bill for heart attacks to be introduced in the 2014 legislation. The CPFF already had their legislation drafted but were willing to talk to the CSFC.

In early 2013, a group of stakeholders asked the administrator of the Colorado Special Districts WC public entity pool, to facilitate. We sat down and started with what the stakeholders did not like about the way things worked in general, and then moved to address these issues with solutions. By focusing on avoiding the problems with the cancer presumption, we found an easy-to-administer accident-type policy format that served everyone’s needs. CPFF felt at the end of the process that if this worked they would consider amending the 2008 WC presumption of cancer statute in favor of an accident-type program. This then became the motivation for the Chiefs and the workers’ compensation pools to make the program work.

In an interesting twist with the heart program, when this proposed mandatory legislation was introduced with both the union and the management association in lock step at the capital, the City Municipal League objected on the grounds that this was an unfunded mandate. In response, the CPFF sought assistance from the State who determined that solving cardiac issues for firefighters was deemed an important safety issue and earmarked $900,000 to reimburse fire operations that met the coverage criteria within the legislation.

For the cardiac program, we started with an insurance industry off-the-shelf solution appropriately priced, but found that underwriters got cold feet. Every accident market approached was skeptical of their ability to deliver our custom product in the time needed. This meant we had to be creative and restructure Multiple Employer Trust laws to accommodate a facility. We built our own program which kept the funds in Colorado, a concern of the governor, and was owned and managed by the members. This solution produced twice the benefit at a reduced cost. Three years later, the program covers one- third of Colorado firefighters. It has paid 90 percent of the 21 submitted claims within 10 days of completed claim form. Rejected claims simply did not meet eligibility requirements.

With the cardiac program working so well, all involved parties became confident that this model could work to solve the presumption issue for cancer as well. Since no funding was available we had to analyze how this accident coverage might work on a voluntary basis where fire operations could obtain coverage under an accident policy and not be liable under the earlier presumption statute. This meant that if a department ever left the program, they would fall back under the 2007 presumption law. Additionally, any firefighter working for a participating department can still file a workers’ compensation claim for cancer but they would have to do it under the 2006 pre-presumption workers’ compensation statute where the burden of proof falls on the employee. We structured it so any benefit received in that scenario would be offset by benefits received under the accident program.

Both of these programs work because our only goal is to address the issues with the presumption rule and apply solutions from other programs that work well. We do not provide health care, retirement, disability, death or spouse/dependent coverage. We simply award a cash benefit based on a diagnosis and an indication of severity to reimburse the anticipated out-of-pocket expenses. Cash awards are paid out over a period of time with limited conditions or offsets. The firefighter is encouraged financially to return to work. The awards are intended to reimburse the firefighter up front for the value of benefits given up under WC and are, for the most part, not taxable.

Employer’s Gains on Cancer Presumption:
  • Elimination of unlimited liability of a firefighter to come back to the department to file a cancer claim once they leave employment
  • No extended period of investigation leaving firefighter without a source of income or question on who is paying the medical bills
  • Payouts capped at $250,000 at highest level
  • Self-insured entities eligible for lower self-insured retentions and 15% to 20% reduced rates
  • Firefighters are incentivized to return to duty
  • Significant percentage of litigation cost savings
  • Elimination of perceived wedge issue between management and labor
Firefighter’s Gains on Cancer Presumption
  • No invasive investigation
  • Payment based on type and stage of cancer
  • Payments start within 10 days of completed claim form
  • Twice as many claims accepted funding same cancer cost as in prior 10 years
  • No offsets other an if a WC claim is filed under 2006 statute
  • Line of duty status as a condition of this program
  • No longer have to sue employer for equitable payment
  • Payments with consideration gained from reduced litigation cost
  • Not taxable, except for rehabilitation payments

The newly created Cancer program was launched on July 1, 2017. 2000 firefighters through 45 departments were founding members. Roughly 25% of the eligible paid firefighters and 10% of the eligible volunteers have signed up for the new program at the date of the writing of this article. The Board of Directors for the public entity pool we administrate has reimbursed the cost of this coverage in full while another WC Pool is considering its options. Commercial carriers have also outlined considerable discounts for their participating members effective January 1, 2018.

Recent pro-employer rulings in the state Supreme Court may embolden some fire departments to stay the course with the existing statutory model, but that flies in the face of potential public outcry over not doing the right thing for their firefighters. First responders are held in the highest esteem by everyone, from children to the elderly. We feel that is motivation enough. Garry Briese, Executive Director for the Colorado State Fire Chiefs Association, calls this program a “historic first-in-the-nation.” Management and labor came together to collaborate on an issue that was intended to benefit firefighters that was fraught with problems. We are all excited to see what successes lay ahead.

Joseph DePaepe CPCU, CIC
Trust Administration
Colorado Firefighter Heart and Cancer Benefits Trust
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