According to the Seattle Times, a Workers’ Compensation insurer serving Colorado ceased administering claims following official criticism over unjustly denied workers’ comp claims, extravagant compensation for executives and expensive junkets.
The sudden move by Pinnacol Assurance will affect around 42,000 employees. These also include roughly 1,000 injured workers who have claims pending, according to Rep. Sal Pace, D-Pueblo.
Pinnacol’s troubles began last year when an investigation by CALL7, a Denver media outlet, found that Pinnacol employees celebrated and mocked injured workers who were improperly denied claims in company emails. At issue was the case of Michael Schuessler, who sued Pinnacol for improperly denying his claim after a workplace accident.
Mr. Schuessler was a construction worker installing a swamp cooler in 2007 when it fell, injuring his head and causing two herniated discs. He told the reporters investigating the company that Pinnacol dismissed his injury as fake and denied his claim. Mr. Schuessler took Pinnacol to court and was awarded $325,000 for emotional distress after a three-year court battle by a jury stunned by the lack of scruples displayed by a company that receives many special tax breaks from the state. The company is appealing the decision.
Already under fire as more cases like Mr. Schuessler’s emerged, investigators then revealed what the insurance company was doing with it’s hefty profit surplus. Apparently, Pinnacol spent hundred of thousands of dollars on boozy incentive vacations and ritzy golf trips, including a $318,000 week long golf trip to Pebble Beach, California.
Pinnacol rigorously defended these junkets, comparing them to even more luxurious trips given to workers by fully private firms. The insurance company’s president, Ken Ross, claimed that trips like $1,500 a night stays at the Mirage in Las Vegas for himself and others are simply necessary to retain talented workers.
What makes Pinnacol’s dirty operating practices even more grievous, is that it is essentially a quasi-state apparatus. While the governor decides who is on the board, the company still operates just like a private insurer. Most vexing to those injured workers denied just compensation, Pinnacol is exempt from paying state taxes.
It is this last feature that may ultimately bar Pinnacol from suddenly breaking it’s contract with the state. Colorado state lawyers are exploring whether the abrupt cancellation is legal as the company received special tax breaks from the state.
Pace has asked legislative lawyers to see if the contract cancellation was legal because of the state law that gave the company tax breaks.
Injured workers in Washington and Seattle should take heart from Mr. Schuessler’s legal victory against this insurance company. If you are an injured worker filing a claim, there is a Washington workers’ compensation attorney at Emery Reddy standing by to be your advocate through this important process.