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Following The Money Trail- Where Do Workers’ Comp Premiums Go?

When an employer pays workers’ compensation premiums, one would hope that money is used to pay for benefits received by eligible claimants. With millions paid out of the workers’ compensation system each year for fraudulent claims, it becomes important to follow the money trail in regards to premiums paid into workers’ compensation.

In a recent article published by Boulder Weekly, lawmakers are considering raiding surplus funds held by Pinnacol Assurance. This government agency known as “the ‘insurer of last resorts’ for workers’ compensation coverage” has come under fire for spending $318,000 on a agency sponsored trip to Pebble Beach. Officials from Pinnacol claim the luxury trips are justified, however state leaders are considering raiding the $500 million in surplus funds held by the agency to be used for the state budget.

This raises an interesting question. Who has rights to this money? The state obviously feels the agency is mismanaging the funds, while the agency clearly feels justified in their spending choices. Let’s not forget the injured workers who at some point in the future may need to receive benefits.

Clearly there are a plenty of issues surrounding this case, however it also raises many concerns. Is this happening in other states? How do we know that the money paid into the workers’ compensation system will be available for employees who are hurt on the job? These are important questions to ask, not just of Pinnacol Assurance and the lawmakers considering a raid on their surplus funds. If funds are not available for workers who submit a claim, who then absorbs the cost of their care? This should be a concern for all employees, employer as well as taxpayers as this type of situation could surely cost everyone involved more money in the long run.