Colorado § 8-42-113.5 - Recovery of overpayments - notice required.

§ 8-42-113.5. Recovery of overpayments - notice required.

(1) If a claimant has received an award for the payment of disability benefits or a death benefit under articles 40 to 47 of this title and also receives any payment, award, or entitlement to benefits under the federal old-age, survivors, and disability insurance act, an employer-paid retirement benefit plan, or any other plan, program, or source for which the original disability benefits or death benefit is required to be reduced pursuant to said articles, but which were not reflected in the calculation of such disability benefits or death benefit:

(a) Within twenty calendar days after learning of such payment, award, or entitlement, the claimant, or the legal representative of a claimant who is a minor, shall give written notice of the payment, award, or entitlement to the employer or, if the employer is insured, to the employer's insurer. If the claimant or legal representative gives such notice, any overpayment that resulted from the failure to make the appropriate reduction in the original calculation of such disability benefits or death benefit shall be recovered by the employer or insurer in installments at the same rate as, or a lower rate than, the rate at which the overpayments were made. Such recovery shall reduce the disability benefits or death benefit payable after all other applicable reductions have been made.

(b) If the claimant or legal representative of a claimant who is a minor was receiving benefits in excess of the amounts that should have been paid under articles 40 to 47 of this title and failed to give the notice required by paragraph (a) of this subsection (1), the employer or insurer is authorized to cease all disability or death benefit payments immediately until the overpayments have been recovered in full.

(b.5) (I) After the filing of a final admission of liability, except in cases of fraud, any attempt to recover an overpayment shall be asserted within one year after the time the requester knew of the existence of the overpayment.

(II) Subparagraph (I) of this paragraph (b.5), as enacted by Senate Bill 09-168, enacted in 2009, is declared to be procedural and was intended to and shall apply to all workers' compensation claims, regardless of the date the claim was filed.

(c) If for any reason recovery of overpayments as contemplated in paragraph (a) or (b) of this subsection (1) is not practicable, the employer or insurer is authorized to seek an order for repayment.

(d) When an overpayment is repaid to the insurer, the insurer shall credit the losses on the claim and report the corrected losses to the insurance rating organization on the next scheduled report for purposes of the employer's experience modification.

Source: L. 97: Entire section added, p. 113, § 2, effective July 1. L. 2009: (1)(b.5) added, (SB 09-168), ch. 184, p. 806, § 2, effective August 5. L. 2010: (1)(b.5) amended, (SB 10-163), ch. 66, p. 231, § 2, effective March 31.

ANNOTATION

Law reviews. For article, "The Game of Liens: Untangling the Statutory Lien Scheme in Colorado Workers' Compensation Cases", see 50 Colo. Law. 48 (Apr. 2021).

Action to recoup overpayment of workers' compensation benefits under subsections (1)(a) and (1)(b) does not violate the discharge injunction of 11 U.S.C. § 524, federal bankruptcy code. City may pursue a determination of whether or not debtor received an overpayment of workers' compensation benefits and recoup any overpayment in accordance with the provisions of subsections (1)(a) and (1)(b). In re Gonzales, 298 B.R. 771 (Bankr. D. Colo. 2003).

City is prohibited under 11 U.S.C. § 524 from collecting any overpayment of workers' compensation benefits from debtor by way of an order for repayment under subsection (1)(c). In re Gonzales, 298 B.R. 771 (Bankr. D. Colo. 2003).

If an employer cannot offset its overpayment of benefits by deducting from ongoing disability payments, then the employer must seek an order of repayment within one year after learning of the overpayment to recover the overpayment. Peoples v. Indus. Claims Appeals Office, 2019 COA 158, 457 P.3d 143.