Colorado Workers’ Compensation Rules and Requirements

Colorado workers’ compensation rules require almost every employer in the state to carry insurance that pays an injured employee’s medical bills and roughly two-thirds of lost wages, regardless of who caused the accident. The Division of Workers’ Compensation (DOWC), part of the Colorado Department of Labor and Employment, runs the program, enforces coverage, and steps in when workers and insurers disagree.¹ The rest of this guide walks through who the rules apply to, the deadlines that control a claim, the benefits available, and what to do when something goes wrong.

Employers Who Must Carry Coverage

Any business with one or more employees working in Colorado must keep workers’ compensation insurance in force at all times. That includes full-time, part-time, and family-member workers.¹ An employer can buy a policy from Pinnacol Assurance (the state’s quasi-public carrier) or any private insurer licensed in Colorado, or it can apply for a self-insurance permit through the executive director of the DOWC.²

The exceptions are narrow. Casual farm and ranch laborers paid less than $2,000 a year, and casual maintenance workers doing jobs unrelated to the employer’s trade, are not treated as employees for coverage purposes.³ Federal employees and some maritime workers fall under separate federal systems, not the state program.⁴

Construction Has Stricter Rules

If you hire contractors for construction work, you must either cover them under your own policy (and may charge them their share of the premium) or get written proof that each one carries insurance. A construction contractor with no employees still has to carry coverage unless they formally reject it through the DOWC.⁵

Going Without Coverage

An uninsured employer faces a daily fine of up to $250 for a first violation and $250 to $500 per day for later violations.⁶ The DOWC can also shut the business down. If someone is hurt during the uninsured period, the employer pays the full value of the claim plus a 25% penalty added to the worker’s benefits.⁵

Employee or Independent Contractor

Colorado presumes anyone performing paid services is an employee. To rebut that, the hiring party has to show both that the worker is free from control over how the job is done and that the worker is customarily engaged in an independent trade or business doing that kind of work.³

Even meeting those two conditions is not enough if the hiring party requires exclusive service, pays an hourly wage rather than a contract rate, provides tools, dictates hours, or blends business operations with the worker’s. Calling someone an independent contractor does not make them one. If the DOWC later concludes the relationship was really employment, the worker can still collect benefits.

Reporting a Workplace Injury

An injured worker has ten days from the date of the accident to give the employer written notice. Employees of self-insured employers get ten working days. Verbal notice does not count. Reporting late can cost one day of compensation for each day of delay, though that penalty is waived if the employer already knew about the injury or you had good cause.⁷

For an occupational disease that develops gradually from workplace exposure, the clock starts when you first notice distinct symptoms, and you have thirty days to notify the employer in writing.⁷

Once the employer knows about an injury that causes more than three lost shifts, permanent impairment, or death, the insurance carrier has ten days to file a First Report of Injury with the DOWC.⁸ Federal OSHA rules run on their own track: a workplace fatality must be reported to OSHA within eight hours, and a hospitalization, amputation, or loss of an eye within twenty-four hours, by phone at 1-800-321-6742 or online.⁹ OSHA reporting does not replace the state filing.

Filing a Formal Claim with the DOWC

To open a claim, the injured worker files a Worker’s Claim for Compensation, Form WC 15.¹⁰ The form asks for the employer and insurance carrier, the date, time, and location of the incident, how it happened, what body parts were affected, any witnesses, and your average weekly wage. Two copies go to the DOWC Customer Service Unit at 707 17th Street, Suite 2300, Denver, CO 80202-3404, by mail or hand delivery. Keep a copy and proof of mailing.

The outside deadline is two years from the date of injury. Miss it and the right to benefits is gone.¹¹

What the Insurer Does Next

The carrier has twenty days after the First Report of Injury is filed (or should have been filed) to tell the DOWC and the worker whether it accepts or disputes the claim.¹² A General Admission of Liability means the insurer accepts the claim and starts paying medical bills and wage replacement. A Notice of Contest means the insurer disputes some or all of the claim, which opens the dispute process. A Notice of Contest is not the end; many disputed claims are later paid after hearings or settlement.

Medical Treatment and Choosing a Doctor

Under Workers’ Compensation Rule 8, the employer or insurer controls the initial choice of treating physician by giving the worker a written Designated Provider List within seven business days of learning about the injury.¹³ The list must contain at least one provider if three or fewer willing providers practice within thirty miles of the workplace, two providers if four to eight are available, and four providers if nine or more are available. If the employer never supplies the list, the worker may pick any physician or chiropractor.

Once a provider is picked, that physician becomes the authorized treating physician (ATP) and directs all care for the claim, including specialty referrals, work restrictions, and the point of maximum medical improvement. The insurer may also request an Independent Medical Examination from a doctor outside the treatment team, who reviews records, examines the worker, and issues an opinion on the injury’s severity and the need for more treatment. You can request a copy of that IME report.

Mileage for travel to medical appointments is reimbursed at $0.63 per mile as of January 1, 2026.¹⁴

Benefits You Can Receive

Benefits fall into several categories tied to how badly and how long the injury affects your ability to work.¹⁵

Temporary Total Disability

If the injury keeps you from working at all while you heal, temporary total disability (TTD) pays two-thirds of your average weekly wage. The weekly amount is capped at a figure that adjusts every July 1 based on the state average weekly wage. For injuries occurring between July 1, 2025, and June 30, 2026, the maximum is roughly $1,397 per week. There is no minimum. Payments continue until you return to work, reach maximum medical improvement, or are released by your doctor.

Temporary Partial Disability

When you go back to work on reduced hours or light duty and earn less than before, temporary partial disability (TPD) pays two-thirds of the difference between your pre-injury wage and your current earnings. A worker who earned $900 a week before the injury and now earns $500 would receive about $267 per week.

Permanent Partial Disability

Once your ATP finds you have reached maximum medical improvement but have lasting limitations, permanent partial disability (PPD) compensates for the ongoing loss. Colorado splits impairments into scheduled injuries (extremities, hands, feet, fingers, toes, eyes, vision, hearing), where the statute assigns a fixed number of benefit weeks per body part, and whole-person injuries (spine, lungs, mental function), rated as a percentage of overall impairment.¹⁵

Permanent Total Disability

If you can never again earn any wages because of the injury, permanent total disability (PTD) pays at the TTD rate for life.¹⁵

Death Benefits

If the injury is fatal, eligible dependents receive two-thirds of the deceased worker’s average weekly wage, capped at 91% of the state average weekly wage, with a minimum of 25% of that maximum.¹⁶ Social Security survivor benefits or federal workers’ compensation payments can reduce the Colorado payment by up to half of those federal amounts.

Maximum Medical Improvement and Impairment Ratings

Maximum medical improvement (MMI) is the point where your condition has stabilized and further treatment is unlikely to help significantly. Your ATP makes that call. Two things happen at MMI: TTD benefits stop, and if you still have lasting limitations, the physician assigns an impairment rating.

Colorado requires every permanent impairment rating to follow the American Medical Association Guides to the Evaluation of Permanent Impairment, Third Edition (Revised), and only a physician with Level II accreditation can issue one. The doctor converts any scheduled body-part impairment into a whole-person percentage, reports it in whole numbers, and subtracts any pre-existing contribution shown by medical records or other objective evidence. The rating is what sets the dollar value of PPD benefits.

Challenging a Contested or Denied Claim

If the insurer files a Notice of Contest, you can request a hearing at the Office of Administrative Courts (OAC) to show the injury is work-related and that benefits are owed.¹⁷ Either side can also request a prehearing conference through the DOWC to resolve discovery issues or narrow the dispute.

You start by filing an Application for Hearing. A non-expedited hearing must be scheduled within 120 days, an expedited hearing within 60 days. The parties exchange medical records, doctor’s reports, employer records, and vocational reports at least twenty days before the hearing. The administrative law judge issues a written decision within fifteen working days after the record closes. If you disagree, you have twenty days from service or mailing of the order to file a Petition to Review. Miss that twenty-day window and you can permanently lose your appeal rights.¹⁷

Attorney Fees

Colorado caps attorney fees in workers’ compensation cases. On unappealed contested claims, a contingency fee above 25% of the contested benefits is presumed unreasonable.¹⁸ The DOWC director can approve a higher percentage when a case is appealed or the attorney puts in extraordinary time. In practice, most injured workers pay nothing upfront because attorneys work on contingency and collect only if benefits are awarded.

Medicare Set-Asides at Settlement

Workers who are already on Medicare or expect to enroll within thirty months of settlement face an extra layer. Federal law requires workers’ compensation settlements to account for future medical costs that Medicare would otherwise pay. The Centers for Medicare and Medicaid Services (CMS) reviews proposed set-asides when the claimant is a current Medicare beneficiary and the total settlement is over $25,000, or when the claimant reasonably expects to enroll within thirty months and the total settlement is over $250,000.¹⁹ If your settlement is anywhere near those numbers, deal with the set-aside before you sign.

1
Department of Labor & Employment. Workers’ Compensation
2
FindLaw. Colorado Code 8-44-101 – Insurance Requirements
3
Department of Labor & Employment. Independent Contractors and Coverage Exemptions
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U.S. Department of Labor. Longshore Program
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Department of Labor & Employment. Workers’ Compensation Insurance Requirements
6
Justia Law. Colorado Code 8-43-409 – Defaulting Employers – Penalties
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Justia Law. Colorado Code 8-43-102 – Notice to Employer of Injury
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Department of Labor & Employment. Reporting Injuries
9
Occupational Safety and Health Administration. Reporting Fatalities, Hospitalizations, Amputations, and Losses of an Eye
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Department of Labor & Employment. File a Workers’ Compensation Claim
11
Justia Law. Colorado Code 8-43-103 – Notice of Injury – Time Limit
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FindLaw. Colorado Code 8-43-203 – Notice of Liability
13
Department of Labor & Employment. Workers’ Compensation Rules of Procedure
14
Department of Labor & Employment. Division of Workers’ Compensation Updates
15
Department of Labor & Employment. Understand Potential Benefits
16
Justia Law. Colorado Code 8-42-114 – Death Benefits
17
Office of Administrative Courts. FAQ – Workers’ Compensation Cases
18
Justia Law. Colorado Code 8-43-403 – Attorney Fees
19
Centers for Medicare & Medicaid Services. Workers’ Compensation Medicare Set Aside Arrangements