Colorado makes it virtually impossible to market individual plans to employees through your place of business except in very narrowly defined situations (Reg 4-6-8). Even using a group carve-out as justification for individual planning is not allowed. If you are purchasing or contributing to a health plan that does not meet the requirements for group coverage in the State of Colorado, call us now. What you don't know about buying individual plans for your employees in place of group insurance can cost you money!

Here is how some employers get in trouble: you are told that you can save thousands of dollars in medical insurance with another plan. You agree, and you put the plan into effect. Perhaps, instead of paying for a group medical plan directly, you adjust employees pay to compensate for the premium. Or you are told that the plans will bill to their homes instead of to you. All of a sudden, things that used to be covered are no longer covered. Your employees are required to submit to medical underwriting at time of enrollment. Some employees are denied coverage. Preventive benefits are no longer available. And suddenly you face the costs involved in a maternity, which you suddenly discover is not included in the plan!

Insured group health plans in Colorado are required to cover preventive benefits and maternity, all without showing any proof of medical insurability. Since maternity is a required benefit under any small group plan*, in the event that one of your employees or dependents becomes pregnant under a plan that you contribute to, either directly or indirectly, guess who is liable for the cost of that care? you got it - you are. Employer Beware!

*Some employers have been told that maternity is "not an issue" for employer groups of less than 15. They have been told that it is "not required". The truth is that maternity IS required for all employer-sponsored medical benefits plans in the State of Colorado. If you have less than 15 employees, you are allowed, provided the carrier agrees, to 'self-insure' for that coverage, and that election must be in writing. This provision was allowed to provide for premium relief for closely held corporations who have no need for a maternity benefit, or for other entities which do not see any reason to cover this benefit. At that moment, the employer is then self insured for that benefit in the event that it happens.

The bottom line is that if you are a small group employer in the State of Colorado, and your health plan is requiring evidence of insurability, you may have an employer-sponsored individual or non-group 'association' plan that places you in jeopardy (some 'association' plans are actually individual plans that are being marketed illegally and do not meet the Division of Insurance guidelines for association plans). If you are an employer, you need to be on a group plan!

If you have further questions about this issue, call us at 303-422-1660, or email us using the link below. Order an on-line quote using the link below.

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