Adding Insult to Injury

Pinnacol Assurance, the state's largest workers' compensation provider, today boasts healthy profits -- and workers have paid the price.

Many people would say that Pinnacol Assurance is a Colorado success story. Benson Von Feldt would disagree.

Von Feldt has spent the last three years fighting Pinnacol, his employer's workers' compensation carrier.

A hardworking man well into his fifties, Von Feldt had been employed at a greenhouse in northern Colorado for many years when he tore his rotator cuff while undoing an oil plug on an engine. His doctors put him into physical therapy. But then he tore the rotator cuff again, so the doctors decided to insert a titanium bolt into his shoulder to help him regain mobility in his arm.

Benson Von Feldt was a hardworking man. Now he 
can hardly work -- and he blames Pinnacol.
Brett Amole
Benson Von Feldt was a hardworking man. Now he can hardly work -- and he blames Pinnacol.
Pinnacol CEO Gary Pon
Pinnacol CEO Gary Pon

Shortly after the surgery, Von Feldt began noticing puss-filled knots forming on his hands and the glands in his neck swelling. His body was rejecting the bolt.

Doctors suspected the metal piece may have become contaminated, causing the bacterial infection, and wanted to remove it. But the Pinnacol nurse responsible for approving all of Von Feldt's medical care wouldn't sign off on the surgery for twenty months. In the meantime, Von Feldt was unable to work, dependent on painkillers.

"What gives them the right to do this to me?" he asks, sobbing. "Pinnacol ruined my life. My doctor told me they take those bolts out daily because people reject them. But I had to wait and wait until it was too late and it ate me. Now my right hand looks like a big mashed potato."

Von Feldt's wife, Sharon, has watched in frustration as her husband's health has disintegrated. She has watched as the man who once tore semis apart now sits in his chair and cries, doped up on meds to get through the day. "I'm very angry at Pinnacol," she says. "I could take my husband into their office and they wouldn't know who he is, even though for the last three years they've made all the decisions that affect his life. If they don't want to pay for surgery, they don't have to."

The Von Feldts had always thought that they'd be covered for any on-the-job injuries, including medical bills, lost wages and rehabilitation costs, because Colorado requires all employers to carry workers' compensation insurance.

But that doesn't mean the carriers compensate the workers.

Pinnacol is the state's largest workers' compensation insurer, with 56,000 policyholders. Last year, while Benson Von Feldt sat at home with an intravenous feed in his arm to kill the bacteria, Pinnacol was paying $123,371 for a fifty-person junket to the secluded Boulders Resort and Golden Door Spa just outside of Scottsdale, Arizona.

"Imagine awakening in an adobe casita that offers an enchanting Arizona desert view of towering cacti, ancient boulders, coyote, deer and jackrabbits," gushes the resort's Web site. "Sip your morning coffee in pampered comfort and enjoy thoughtful touches such as overstuffed leather chairs, hand-hewn wood beams and aromatic wood-burning fireplaces."

The resort offers tennis, swimming, hiking, horseback riding and golf on two eighteen-hole Jay Morrish-designed courses. In the evening, guests can even go on a desert wildlife tour outfitted with night-vision gear.

Life is good for those who run Pinnacol Assurance, even when they're not partying in the desert. Pinnacol pays its president, Gary Pon, $419,000 per year -- $530,000 once a bonus based on performance kicks in. Eight other executives are expected to make more than $200,000 this year.

Those fancy salaries are matched by equally lavish working conditions for the company's 540 employees. Pinnacol's $29 million state-of-the-art headquarters in Lowry debuted just last year, featuring original artwork on the walls, frosted-glass doors, cushy leather sofas and computers in the lobby.

And once employees leave those hallowed walls, there are plenty of company-sponsored ways to relax. Pinnacol spends $80,000 a year on a skybox at Invesco Field at Mile High where executives and business associates can enjoy Broncos games, plus another $27,520 for Colorado Avalanche and Denver Nuggets tickets and $11,436 for Rockies tickets.

All in all, it's an excellent working environment for a company whose stated mission is "to provide an assured source of workers-compensation protection to Colorado employers and their greatest asset -- their employees."

The company was started by the State of Colorado and still enjoys state-sponsored benefits and breaks given no other insurance company. The only people who don't seem to be getting a break are the injured employees who depend on the company for care.

Pinnacol's roots go back to the beginning of the last century and the very beginning of workers' compensation.

In 1915, the Colorado Legislature mandated that all employers carry insurance to protect their employees in case of on-the-job accidents, and lawmakers established a state agency, known as the State Compensation Insurance Fund, to provide insurance to any Colorado business that couldn't find coverage elsewhere. The fund wrote nearly $50,000 in premiums in its first year.

The system was the culmination of years of battles between organized labor and business. The labor movement had been galvanized by the bitter experiences of workers being debilitated at work and then cast aside; businesses wanted protection from lawsuits by injured employees. The result was a grand compromise that became known as workers' compensation.

Under the workers' comp system, employees gave up their right to sue their employers for negligence if they were injured on the job; in return, employers agreed to pay into an insurance system that would provide medical care to those injured at work and disability payments to those who could no longer work. Businesses would pay the full cost of the program, and all accidents, regardless of cause, would be covered.

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