2026 Legislative Update

Signed: June 2, 2026 | Effective: August 11, 2026 (90 days after the session adjourned)

Key Changes:

• Updates language throughout the Workers’ Compensation Act to allow for electronic service and exchange of documents to the Division, as well as between parties.
• Eliminates the requirement that the DOWC offer employers a prehearing conference  “on the issue of default” during the course of a coverage compliance investigation.
• Clarifies that penalties are paid to the Colorado Uninsured Employer (CUE) Fund, while other funding sources continue to go to other funds.
• General language updates to align with technology changes at the DOWC.

Signed: May 29, 2026 | Effective: May 29, 2026

Key Changes:

• When contractors request a building permit for construction projects exceeding one million dollars from a local state or county permitting agency, the contractors must now declare whether they have workers’ compensation insurance or have rejected coverage.
• The declaration will be made on a new DOWC compliance form.

Signed: June 2, 2026 | Effective: January 1, 2027

Key Changes:

• Currently, insurance carriers utilize reserved claim costs to determine an employer’s modification factor. This bill allows employers to request that carriers update experience modifications to reflect actual lower claim costs now that a claim is closed. The lower claim cost must lower the modification factor by:
  • At least .05 than previously reported
  • From above 1.0 to 1.0 or below
• The carrier has 30 days from the employer’s request to make the adjustment and apply the credit to the employer’s premium.

Signed: June 4, 2026 | Effective: August 11, 2026 (90 days after the session adjourned)

Key Changes:

• Defines the symptoms of both cold and heat-related injuries and illnesses. 
• Requires employers to record temperature conditions, and to provide water, breaks, shade, and training to workers. 
• Requires the Division of Labor Standards and Statistics (DLSS) to obtain data from the DOWC, Colorado Department of Public Health and Environment (CDPHE), and the Center for Improving Value in Health Care regarding temperature-related injuries or illnesses.
• By January 15, 2027, DLSS must have a public-facing platform with data regarding temperature-related illnesses or injuries.
• By July 1, 2028, DLSS must provide written procedures for training businesses on worker protections, the identification and response to medical emergencies, and the tracking of workplace temperature data.

Signed: June 2, 2026 | Effective: January 1, 2027

Key Changes:

• Applies to insurance carriers, pharmacy benefit managers, and behavioral health organizations that use or contract with companies using AI systems for the purposes of utilization review.
• Defines the criteria that the AI system must use in its reviews (medical history, clinical circumstances, and other relevant clinical information).
• Prohibits the AI system from:
  • Only applying group data without reference to individual data.
  • Discriminating against individuals.
• The system must be applied equitably, retain records, be audited internally, and comply with state and federal laws.
• The individual’s data cannot be used beyond these purposes.
• Companies using AI for utilization review must notify the state of:
  • The functions and points in the utilization review process that will be performed by AI.
  • Their human oversight processes.
  • Their plan to maintain their AI audit records.
• Denials of coverage cannot be exclusively based on AI determinations, but must be reviewed and approved by a medical professional.
• AI may not be used for psychotherapy services with the exception of billing, health records, or video/non-therapeutic software. Carrier payment for AI psychotherapy is prohibited.

The Colorado Division of Workers’ Compensation adopted changes to Rule 1: General Definitions and General Provisions, effective July 15, 2026.

Key Changes:

• Updates general definitions.
• Provides updated guidance regarding service methods to parties, as well as the use of the DOWC’s new external stakeholder portal.
• Clarifies how Colorado state holidays are factored into the timely service of documents and benefit payments.

The Colorado Division of Workers’ Compensation adopted changes to Rule 5: Claims Adjusting Requirements, effective July 15, 2026.

Key Changes:

• Updates admission submission requirements via Electronic Data Interchange (EDI) based on DOWC technology upgrades.
• Provides updated guidance for documents submitted to the DOWC by email.
• Offers updated formatting for injured workers who either don’t have an Social Security Number (SSN) or whose SSN is unknown.
• Requires carriers to notify all parties when the adjuster changes on a claim (for a period exceeding 30 days).
• Clarifies carrier position statements on post-maximum medical improvement (MMI) benefits.
• Expounds on the DOWC’s requirements regarding timely and accurate initial and ongoing indemnity benefit payments, as well as the termination of those benefits.
• Clarifies how Colorado state holidays are factored into the timely service of documents and benefit payments.
• Clarifies the calculation expectations for permanent mental impairment.

The Colorado Division of Workers’ Compensation adopted language for Rule 16 that adopts HIPAA X12 standards for electronic billing of medical claims, effective January 1, 2026.

Key Changes:

• Medical bills are now required to be submitted and processed in a HIPAA-compliant electronic format. 

The Colorado Division of Workers’ Compensation adopted new language for Rule 18, effective January 1, 2026.

Key Changes:

• All Spanish interpreters providing services in the workers’ compensation system must hold an approved certification. This change is intended to enhance the accuracy and quality of communication between injured workers and healthcare providers, promoting meaningful access to care. 
• Enhanced documentation standards for psychological evaluations. These updates are designed to improve clarity, consistency, and transparency in psychological reporting, ensuring that medical opinions are supported by appropriate clinical findings. 
• Increased reimbursement for CRNAs who are under the direction of an anesthesiologist to 100% of the maximum anesthesia value.
• Revised the classification of dry needling to procedure, which subjects it to a per date of service unit allowance.