(1) (a) There is hereby created, as a separate account in the risk management fund, the state employee workers' compensation account, which consists of all moneys that may be appropriated thereto by the general assembly and that may be otherwise made available to it by the general assembly for the purpose of establishing a workers' compensation self-insurance program for state employees or for the procurement of commercial workers' compensation insurance in accordance with subsection (2) of this section. Moneys "otherwise made available" include transfers of moneys to the account authorized in the general appropriation act. The moneys in the account are continuously appropriated for the purposes of the state employee workers' compensation account other than the direct and indirect administrative costs of operating the risk management system, including legal services, litigation expenses, and third-party administrator expenses. The general assembly shall make annual appropriations from the account for the direct and indirect administrative costs of operating the risk management system, including legal services, litigation expenses, and third- party administrator expenses, that are attributable to the operation of the state employee workers' compensation account. At the end of any fiscal year, all unexpended and unencumbered moneys in the account must remain in the account and may not be credited or transferred to the general fund or any other fund. All interest earned from the investment of moneys in the account pursuant to this section must be credited to and become part of the account. (b) (Deleted by amendment, L. 2014.) (2) Expenditures shall be made out of the state employee workers' compensation account in the risk management fund in accordance with subsection (1) of this section only for the following purposes: (a) To pay workers' compensation benefits to state employees in accordance with articles 40 to 47 of title 8, C.R.S., and to pay the administrative costs of operating the department of personnel in relation to the workers' compensation self-insurance program for state employees; (b) To pay the premium for commercial workers' compensation insurance, if the state elects not to be self-insured for workers' compensation purposes. (3) Prior to July 1, 1990, nothing in this section shall apply to the department of institutions; but this section shall apply to the department of human services beginning on July 1, 1990. (4) Amounts which are recorded in the state employee workers' compensation account as claims, including reserves, but which are not required to be paid in the current fiscal year shall not be considered as expenditures in excess of the amount authorized by an item of appropriation for purposes of section 24-75-109. (5) (a) (I) Notwithstanding section 8-44-105, C.R.S., if the state elects to self-insure workers' compensation claims as authorized in this section or to insure for such claims through an entity other than Pinnacol Assurance, created in section 8-45-101, C.R.S., on and after the effective date of such election, the state shall be directly and primarily liable for all liabilities due on all workers' compensation claims after such election that arise on and after the beginning date of the initial policy period in the annually renewable memorandum of agreement containing a premium payment plan in effect between the state and Pinnacol Assurance. (II) In no event shall the department of personnel elect to self-insure for workers' compensation claims prior to the beginning of a fiscal year in which the general assembly appropriates sufficient funds for such self-insurance. (b) (I) Funding of the liability obligations assumed by the state from Pinnacol Assurance pursuant to paragraph (a) of this subsection (5) beyond a current fiscal year is contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available. (II) Nothing in this paragraph (b) shall be construed to relieve the state of any liability obligation if the state elects to self-insure or insure through an entity other than Pinnacol Assurance pursuant to paragraph (a) of this subsection (5). (c) Notwithstanding the provisions of section 8-44-201 (1), C.R.S., if the state elects to self-insure workers' compensation claims as authorized in this section, the executive director of the department of labor and employment shall not prescribe or apply security requirements in granting or continuing permission for such state self-insurance program. (6) When communicating with or reaching an agreement with a state employee about a workers' compensation claim, the state shall neither suggest nor require: (a) That the state employee resign from state employment; (b) That the state employee refrain from seeking or obtaining employment with the state in the future; or (c) That any other restrictions be placed on the state employee's ability to work for the state. (7) A provision of an agreement, contract, or arrangement that violates subsection (6) of this section is void and unenforceable, but all other provisions of such an agreement, contract, or arrangement remain enforceable unless otherwise prohibited by law. (8) As used in this section, "state employee" means an individual who currently is or was in the past employed by the state, whether or not the individual is under the state personnel system or exempt from the state personnel system. (9) Pursuant to the legislative intent to explore the availability of insurance policies as declared in section 24-30-1501 (1), if the state elects to self-insure workers' compensation claims, the department of personnel shall send or cause to be sent a request for interest to Pinnacol Assurance and at least five other insurance companies that provide workers' compensation insurance in Colorado; except that the department of personnel shall not send a request for interest to Pinnacol Assurance more than once every three years. The department shall send the requests for interest in accordance with this section in 2026 and at least once every three years thereafter. Each request for interest must request the following information from each responding insurance company for the following calendar year: (a) An estimate of the total cost to the state to purchase workers' compensation insurance; (b) The company's ability to provide workers' compensation insurance that would cover all state employees; and (c) A detailed description of the workers' compensation coverage that the company would provide. (10) For each request for interest obtained pursuant to subsection (9) of this section, the department of personnel shall prepare and submit a report to the general assembly no later than December 10 of each year. Each report must specify: (a) The name of the responding insurance company, unless the department received only one response in which case the name of the sole responding insurance company will be redacted from the report; (b) The total cost estimated by the responding insurance company to provide workers' compensation insurance coverage to the state; (c) Whether purchasing workers' compensation insurance from the responding insurance company would require the state to contract with a third-party administrator, and what the additional cost to the state would be, if any; (d) A detailed description of the workers' compensation coverage that the responding insurance company would provide; (e) The costs associated with the self-insurance selected by the state for the current calendar year, including a breakdown of that cost which must include, but is not limited to, indemnity benefits, medical benefits, costs paid to third party administrators and an identification of those third party administrators, actuarial costs, premiums paid for out of state insurance, each state department's costs, actual or estimated costs of litigation, and other permits, fees, payments and expenditures related to the state's self-insurance of workers' compensation claims; and (f) Whether the state's costs related to self-insurance of workers' compensation claims increased or decreased compared to the previous calendar year. (11) In addition to the report requirements specified in subsection (10) of this section, the first report must specify, over the previous three years, to which insurance companies the state sent requests of interest, the total number of insurance companies that responded to the requests, and the estimated cost reported in each received response, if any.
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