EPA Decision Impacts Business Permits and Gas Prices for Colorado

In April, the Environmental Protection Agency (EPA) announced that it was downgrading the quality of the Northern Front Range and Metro Denver’s air from “serious” to “severe,” putting us in violation of federal ozone standards.

The Chamber is invested in preserving Colorado’s environment and improving our air quality. We recognize that clean, fresh air is an essential aspect of our quality of life in Colorado. Additionally, the Chamber is dedicated to implementing business friendly policy that benefits all Coloradans. It is because of these beliefs that the Denver Metro Chamber, along with a coalition of other organizations, issued a letter to the EPA urging their reconsideration on the grounds that Colorado is a national leader on air quality regulation and this new classification could be economically catastrophic.

Since 2019, the Colorado General Assembly has passed at least 45 statutes addressing energy, the environment or air quality. While Colorado already has a slew of rules and regulations to improve air quality within the state, there are many factors that are beyond our control but play a major role in impacting air quality.

The Air Pollution Control Division found that 71% of Colorado’s ozone is outside of the state’s control, with international transport or “boundary conditions” making up 51% of contributions to Colorado’s ozone. Additionally, unpredictable disasters such as wildfires make up 10% of ozone contributions, and another 10% comes from naturally occurring emissions. With Colorado only influencing 29% of the state’s ozone, the EPA reclassification would be burdening Coloradans for circumstances beyond their control.

One of the biggest potential impacts of the reclassification for Coloradans would be the mandated transition to reformulated gasoline (RFG), a type of gasoline that reduces emissions from all gasoline-burning motor vehicles and engines.

The switch to RFG means an increase of $0.50 to $1.00 or more in gas prices, and because only 40% of Colorado’s gasoline is produced in-state, Colorado would become reliant on RFG distributors in Texas and California, making the state more susceptible to gasoline shortages and price hikes. This switch to RFG is estimated to cost Colorado residents and businesses between $800 million and $1 billion.

Although RFG is designed to lower emissions in vehicles, studies show that their results are not nearly worth their cost. In 2018, the University of Denver conducted a study titled, “Evaluation of Emissions Benefits of Federal Reformulated Gasoline versus Conventional Gasoline.” The study showed that ever since the phase-in of new fuel standards in 2017, RFG no longer plays a significant role in lowering emissions.

The Denver Metro Chamber understands that the longtime preservation of Colorado’s environment and air quality is crucial for the wellness of Coloradans and the business climate. We believe that this decision by the EPA would have minimal improvements on air quality in Colorado, and that there are more effective solutions available.

Instead, the Denver Metro Chamber of Commerce and its coalition urge Governor Polis to request that the EPA reinstate the 179(B) waiver, which provides a small allowance for emissions from beyond our borders under the Clean Air Act, or, at least, request an extension of the deadline for compliance with ozone standards.

The Denver Metro Chamber of Commerce and its coalition are also calling on the EPA and state of Colorado to collaborate and take a pragmatic approach to reducing ozone that protects public health while not putting additional burdens on Coloradans. The EPA and state of Colorado should be developing incentives, not mandates, to improve our state’s air quality. A letter was submitted by the Chamber to legislative leaders emphasizing the importance of this issue for the business community.

For more background, read our full letter to the EPA.

Changes Coming to Colorado Health Plans

In Nov. 2020, Colorado voters approved Proposition 118, which allowed for the implementation of a state-run Paid Family and Medical Leave Insurance (FAMLI) program. Both employers and employees are required to contribute premiums for the program beginning Jan. 1, 2023, and by Jan. 2024, the FAMLI program will begin providing benefits to employees.

The Colorado Department of Labor and Employment (CDLE) has recently released the final draft of FAMLI benefit rules, and it has begun a series of stakeholder meetings about FAMLI.

Colorado’s FAMLI program will cover most workers, including self-employed individuals and independent contractors. The premiums are set to 0.9% of an employee’s wage, with costs half covered by the employee and half by the employer. For employers with 9 or fewer employees, employers are required to collect employee premiums, but are not required to provide an employer premium. For employers with 10+ employees, the requirement is to collect both the employer and employee premium.

The next stakeholder meeting for the FAMLI program will be in August to discuss private plans. Additional information on the program and upcoming meetings can be found on the FAMLI website.

In other health care news, after the passage of HB21-1232, which established a standardized health plan to be offered in Colorado, the Colorado Option will be available to all Coloradans who purchase their health insurance on the individual market and to employers with fewer than 100 employees starting in 2023. Health insurance plans are required to lower premiums on Colorado Option plans for individuals, families and small businesses by 15% by 2025.

Throughout 2021, the Division of Insurance has engaged in a variety of stakeholder meetings and rulemaking hearings. The Colorado Option’s Advisory Board may consider recommendations to streamline how carriers make determinations on whether a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary for a patient in the plan.

It was evident in these initial stakeholder meetings that there are still a large number of unanswered questions. For instance, the Division of Insurance has not identified the timing of when carrier will be provided with target reductions they are expected to meet, and there is question about the ability for carriers to determine that the PRR is attributed to a hospital, provider or another factor,

For additional information visit the Colorado Department of Regulatory Agencies’ website.