Colorado Gov. Jared Polis is back with a familiar pitch: privatize Pinnacol Assurance, the state affiliated workers’ comp carrier, and free up roughly $400 mn for the budget, according to BestWire.
Jared Polis framed the idea in his latest budget letter, saying Colorado would simply join the long list of states that already mutualized or privatized their former state funds. It’s not a new drumbeat.
He pushed a similar plan last year, and honestly, the chatter around spinning off Pinnacol has hovered for decades.
Polis said the shift would let Pinnacol diversify its customer base, scale more efficiently, and plug into broader multistate risk pools. Right now, the carrier sits locked inside Colorado’s borders by statute.
And that’s becoming a bigger problem as the workforce spreads across states and remote work turns old business models into fossils.
He said Pinnacol’s current structure blocks it from issuing policies that cover out of state workers. That leaves Colorado employers with multistate staff shopping elsewhere for affordable comp coverage. Maybe that worked in 1995; today, it’s a strain.
As the workplace has evolved to include more workers who work remotely and across state lines, Pinnacol faces challenges to its business model.
Colorado Gov. Jared Polis
“For example, under Pinnacol’s current structure, it is prohibited from providing insurance policies that cover workers outside Colorado, which hampers the ability of Colorado businesses with out-of-state employees to obtain affordable, high-quality workers’ compensation coverage,” Polis wrote.
According to our analysts, that geographic lock in creates an uneven risk profile that gets worse each year.
Polis warned that standing still means shrinking market share, rising premiums, and thinner benefits. Pretty blunt, but not wrong. A static state fund inside a dynamic labor market is a slow bleed.
Carole Walker, who leads the Rocky Mountain Insurance Information Association, said any privatization plan has to put Pinnacol on equal footing with competitors.
Right now, the carrier doesn’t pay premium taxes. If it becomes a for profit company, Walker said lawmakers need to figure out taxes, contributions to the guaranty fund, and how a newly privatized Pinnacol fits into the wider regulatory landscape. She said those questions can’t get glossed over, and we tend to agree.
The politics will be loud, but the issue itself isn’t abstract. It’s about whether Colorado sticks with a structure built for a world that barely exists anymore, or pushes Pinnacol into the broader national workers’ comp market where the rules and risks get bigger, but the opportunities do too.
