General Provisions

General provisions of "welfare benefits plans" that provide for health and other benefits are controlled by legislation stemming from the Departments of Labor and Treasury along with Colorado law. For purposes of this article, the rules in Colorado as they apply to groups of 2 - 50 employees will be used. Business groups of one are regulated outside the HIPAA 2-50 employee's rule.

An employer in Colorado, if offering, sponsoring, or subsidizng an employee health plan, must choose group coverage. Businesses in Colorado with 2-50 employees may choose from any group medical plan made available by any insurer available in the state without proof of medical insurability. Under these plans, your rates for coverage may be based on a limited number of factors, such as location, industry, and tobacco status, for example. Premium rate-ups based on the health status of your employees are no longer allowed under state law, amended in 2009. Premiums can be discounted, based on ratings factors, below the index rate, based upon SIC code, however.

In choosing group coverage, you have options and choices available. You may:

set the waiting period,
establish the amount of the employer contribution, subject to limitations imposed by the carrier,
select the plan type, options, and other selected benefits,
choose the open enrollment period, 24 hour coverage, and other provisions that are allowable,
Legally discriminate between classes of employees,
deny access to various employee classes, such as part-time, seasonal, etc., from your health plan.

You will be expected to:

meet and maintain a minimum employee participation level,
notify, enroll, or waive all new employees according to the rules and waiting periods that you have set up for your plan,
pay all premiums in a timely manner, and, in the event of a lapse of coverage, be expected to pay for employee medical expenses for which you collected premiums,
comply with any audit requirements to ensure compliance with participation and employer requirements,
make an Initial Notice of COBRA rights available to all employees, if required,
Provide for COBRA or state continuation to all terminated Qualified Beneficiaries.

Employee rates for coverage, depending on the health plan, can either be age-based or composite (an average of all ages in your group). Generally, health plans offer composite rates if you have more than 10 employees. Initial group rates are guaranteed for 12 months. Maternity coverage is applicable to all employees, regardless of gender or age. Renewal rates may not take into account the health status and claims history of your employees.

Rate assessments for Cover Colorado, required by Colorado law, are typically done yearly through your group billing. This is a tax placed on all small business employers and their employees to fund the high risk uninsured pool.

Health insurance renews on a month-to-month basis in Colorado; only the rates are subject to a 12 month term. If you wish to replace coverage, you need to notify your insurer or health plan a minimum of thirty days prior to your termination of coverage, in writing. An insurer or health plan cannot deny you renewal of your small group medical coverage for any claims-related reason, barring fraud or misrepresentation, unless you are on a partially self-funded plan, not governed by small group insurance rules.

If you have an out-of-state office, employers who have more than 50% of their employees out-of-state may face difficulty in getting coverage in Colorado, as may employers who have 1099 employees, passive investors in need of coverage, or employers in passive activities, such as oil & gas partnerships and other tax shelters.There may also be limitations on husband / wife partnerships.

Life Insurance, disability coverage, dental insurance, and other forms of group insured benefits are not generally guaranteed issue and require underwriting. Plans of this nature can be declined for any number or reasons, including pre-existing conditions, occupational code or industry, time in business and other considerations.

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