Garfield OKs insurance, tax suits against state

Garfield County commissioners have authorized the pursuit of litigation against the state over high health insurance costs for residents and energy-company tax refunds that are costing tax entities millions of dollars.

The issues are unrelated except for the commissioners’ contention that state agencies have failed to adequately respond to its concerns, and they say lawsuits will be filed unless they get satisfactory answers soon.

Commissioners object to the fact that Garfield County has been included by the state Division of Insurance in a resort-region rating area for individual and small-group insurance under the Affordable Care Act. That resulted in county residents being charged what are being described as the highest premiums in the country.

County officials say Garfield County was classified along with the high-cost resort areas of Pitkin, Eagle and Summit counties even though Garfield’s health-care costs are much lower.
“I believe we are being discriminated against. In fact, I don’t believe it, I know we are being discriminated against,” Commissioner Tom Jankovsky said this week before joining in voting to authorize litigation in the matter.

The insurance division recently said the geographic ratings will remain the same in 2015 because no new data is available to warrant recommending a change. However, it said it will launch a study of health care costs, working with hospitals, insurance carriers, the pharmaceutical industry and other interests, and will examine regional cost variations and why they occur.

Garfield County Attorney Frank Hutfless said the suit will be filed “if we cannot achieve more of an immediate resolution and have the insurance department address our concerns.”

However, Garfield Commissioner John Martin noted that the earliest the county’s ratings area might change is 2016.

“That really prolongs the penalty or the discrimination against our citizens,” he said.

County manager Andrew Gorgey noted that the county has made numerous attempts to work with the insurance division on the matter.

Likewise, county officials feel the state has failed to adequately respond to its concerns over the handling of a 2010 Colorado Court of Appeals ruling favoring Noble Energy in a lawsuit against the Department of Revenue. Noble contended hydraulic fracturing materials such as sand are just part of the fracking process and should not have been subject to sales tax.

Its suit sought $2.8 million plus interest, but resulted in other companies putting in for refunds. As a result, more than $4 million reportedly has been refunded in Garfield County alone by withholding sales tax distributions, affecting not just the county but library, emergency responder and other tax jurisdictions. Some of those rely heavily on sales tax dollars.

The county objects to the fact that county funds are being used to pay for the suit claims even the county wasn’t a party to the litigation. Likewise, an official with Rio Blanco County, which also has been affected by the ruling, has questioned why the state didn’t appeal the ruling to the state Supreme Court.

While Garfield County hopes to continue trying to resolve the matter through negotiations, officials say the Department of Revenue hasn’t been helpful so far.

“Their response to very direct questions has been wholly unsatisfactory,” Gorgey said.

In a written response to the county, the department said it can “smooth out revenue distributions to Garfield County to reduce the variability of payments and allow for budget planning.” It also made other recommendations including that the county eliminate a machinery and machine tools exemption that represents a large portion of claims for refunds affecting the county, and attempt to have the legislature overturn the Noble decision. The department also has said it only distributes rather than appropriates money, and isn’t in a position to backfill the refunded amounts.




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