DEPARTMENT OF REGULATORY AGENCIES Division of Insurance LIFE, ACCIDENT AND HEALTH, Series 4-6 3 CCR 702-4 Series 4-6 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ Regulation 4-6-2 GROUP COORDINATION OF BENEFITS Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Model COB Contract Provisions Section 6 Rules for Coordination of Benefits Section 7 Procedure to be Followed by Secondary Plan Section 8 Notice to Covered Persons Section 9 Miscellaneous Provisions Section 10 Effective Date for Existing Contracts Section 11 Severability Section 12 Enforcement Section 13 Effective Date Section 14 History Appendix A Model COB Contract Provisions Appendix B Consumer Explanatory Booklet Section 1 Authority This regulation is promulgated under the authority of § §10-1-109 and 10-16-109, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to:

A. Permit, but not require, plans to include a coordination of benefits (COB) provision unless prohibited by federal law;

B. Establish a uniform order-of-benefit determination under which plans pay claims;

C. Provide authority for the orderly transfer of necessary information and funds between plans;

D. Reduce duplication of benefits by permitting a reduction of the benefits to be paid by plans that, pursuant to rules established by this regulation, do not have to pay their benefits first;

E. Reduce claims payment delays; and F. Require that COB provisions be consistent with this regulation. Section 3 Applicability This regulation shall apply to all group health coverage plans issued by carriers licensed to do business in Colorado under Article 14, 16 and 19 of Title 10, C.R.S. Section 4 Definitions As used in this regulation, these words and terms have the following meanings:

A. “Allowable expense” means a health care service or expense including deductibles, coinsurance or copayments, that is covered in full or in part by any of the plans covering the person, except as set forth below or where a statute requires a different definition. This means that an expense or service or a portion of an expense or service that is not covered by any of the plans is not an allowable expense.

1. 1. The following are examples of expenses or services that are not an allowable expense:
   1. a. If a covered person is confined in a private hospital room, the difference between the cost of a semi-private room in the hospital and the private room, (unless the patient’s stay in the private hospital room is medically necessary in terms of generally accepted medical practice or one of the plans routinely provides coverage for private hospital rooms) is not an allowable expense.
      1. b. If a person is covered by two (2) or more plans that compute their benefit payments on the basis of usual and customary fees, any amount in excess of the highest of the usual and customary fee for a specified benefit is not an allowable expense.
      2. c. If a person is covered by two (2) or more plans that provide benefits or services on the basis of negotiated fees, any amount in excess of the highest of the negotiated fees is not an allowable expense.
      3. d. If a person is covered by one plan that calculates its benefits or services on the basis of usual and customary fees and another plan that provides its benefits or services on the basis of negotiated fees, the primary plan’s payment arrangement shall be the allowable expense for all plans.
   2. 2. The definition of “allowable expense” may exclude certain types of coverage or benefits such as dental care, vision care, prescription drug or hearing aids. A plan that limits the application of COB to certain coverages or benefits may limit the definition of allowable expenses in its contract to services or expenses that are similar to the services or expenses that it provides. When COB is restricted to specific coverages or benefits in a contract, the definition of “allowable expense” shall include similar services or expenses to which COB applies.
   3. 3. When a plan provides benefits in the form of services, the reasonable cash value of each service will be considered an allowable expense and a benefit paid.
   4. 4. The amount of the reduction may be excluded from allowable expense when a covered person’s benefits are reduced under a primary plan, because the covered person does not comply with the plan provisions concerning second surgical opinions or precertification of admissions or services.
   5. 5. If the primary plan is a closed panel plan with no out-of-network benefits and the secondary plan is not a closed panel plan, the secondary plan shall pay or provide benefits as it were primary when no benefits are available from the primary plan because the covered person uses a non-panel provider, except for emergency services that are paid or provided by the primary.
   6. 6. If the two plans are closed panels:
      1. a. The two plans will coordinate benefits for services that are covered services for both plans, including emergency services, authorized referrals, or services from providers that are participating in both plans.
      2. b. COB does not occur if there is no covered benefit from either plan. This may occur in various circumstances including, if the enrollee did not go to either plan’s closed panel of providers, unless there is a covered benefit (i.e. medical emergency, authorized out of network referral, etc).
      3. c. If the enrollee obtains services that are covered benefits of the primary plan, the secondary carrier shall coordinate benefits only to the extent that there are benefits or reserves available.
      4. d. If the service is not a covered benefit of the primary plan but the service is a covered benefit of the secondary plan (i.e. the Covered Person went to a provider who does not participate with the primary plan and the service is not due to a medical emergency), (i.e., the Covered Person went to a provider who does not participate with the primary plan the services is not due to a medical emergency), the secondary plan will pay benefits as though they are primary.

B. “Claim” means a request that benefits of a plan be provided or paid. The benefits claimed may be in the form of:

1. 1. Services (including supplies);
   1. 2. Payment for all or a portion of the expenses incurred;
   2. 3. A combination of Paragraphs 1 and 2 above; or 4. An indemnification.

C. “Claim determination period” means a period of not less than twelve (12) consecutive months, over which allowable expenses shall be compared with total benefits payable in the absence of COB, to determine whether overinsurance exists and how much each plan will pay or provide.

1. 1. The claim determination period is usually a calendar year, but a plan may use some other period of time that fits the coverage of the group contract. A person is covered by a plan during a portion of a claim determination period if that person’s coverage starts or ends during the claim determination period.
   1. 2. As each claim is submitted, each plan determines its liability and pays or provides benefits based upon allowable expenses incurred to that point in the claim determination period. That determination is subject to adjustment as later allowable expenses are incurred in the same claim determination period.

D. “Closed panel plan” means a health maintenance organization (HMO), preferred provider organization (PPO) or other plan that provides health benefits to covered persons primarily in the form of services through a panel of providers that have contracted with either directly or indirectly or are employed by the plan, and that limits or excludes benefits for services provided by other providers, except in cases of emergency or referral by a panel provider.

E. “Coordination of benefits” means a provision establishing an order in which plans pay their claims, and permitting secondary plans to reduce their benefits so that the combined benefits of all plans do not exceed total allowable expenses.

F. “Custodial parent” means the parent awarded sole custody of a child by a court decree. In the absence of a court decree awarding sole custody, the parent with whom the child resides for more than one half of the calendar year without regard to any temporary visitation is the custodial parent.

G. “Hospital indemnity benefits” means benefits not related to expenses incurred. The term does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.

H. “Plan” means a form of coverage with which coordination is allowed or required. The definition of plan in the group contract must state the types of coverage that will be considered in applying the COB provision of that contract. The right to include a type of coverage is limited by the rest of this definition. Separate parts of a plan for members of a group that are provided through alternative contracts that are intended to be part of a coordinated package of benefits are considered one plan and there is no COB among the separate parts of the plan.

1. 1. The definition shown in the model COB provision in Appendix A is an example but any definition that satisfies this subsection may be used.
   1. 2. This regulation uses the term “plan.” However, a contract may use “program” or some other term that meets the definition of a plan.
   2. 3. Plan may include:
      1. a. Group insurance contracts and group subscriber contracts;
      2. b. Uninsured arrangements of group or group-type coverage;
      3. c. Group or group-type coverage through closed panel plans;
      4. d. Group-type contracts. Group-type contracts are contracts, which are not available to the general public and can be obtained and maintained only because of membership in or connection with a particular organization or group, including blanket coverage;
      5. e. The amount by which group or group-type hospital indemnity benefits exceed $200 per day;
      6. f. The medical care components of group long term care contracts, such as skilled nursing care;
      7. g. The medical benefits coverage in group, group-type and individual automobile “no fault” and traditional automobile “fault” type contracts; and h. Medicare or other governmental benefits, as permitted by law, except as provided in Paragraph (4)(i) below. That part of the definition of plan may be limited to the hospital, medical and surgical benefits of the governmental program.
   3. 4. Plan shall not include:
      1. a. Individual or family insurance contracts;
      2. b. Individual or family subscriber contracts;
      3. c. Individual or family coverage through closed panel plans;
      4. d. Individual or family coverage under other prepayment, group practice and individual practice plans;
      5. e. Group or group-type hospital indemnity benefits of $200 per day or less;
      6. f. School accident-type coverages. These contracts cover students for accidents only, including athletic injuries, either on a twenty-four-hour basis or on a “to and from school” basis;
      7. g. Benefits provided in group long-term care insurance policies for non-medical services, for example, personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;
      8. h. Medicare supplement policies;
      9. i. A state plan under Medicaid; or j. A governmental plan which, by law, provides benefits that are in excess of those of any private insurance plan or other non-governmental plan.

I. “Primary plan” means a plan whose benefits for a person’s health care coverage must be determined without taking the existence of any other plan into consideration. A plan is a primary plan if either of the following is true:

1. 1. The plan either has no order of benefit determination rules, or its rules differ from those permitted by this regulation; or 2. All plans that cover the person use the order of benefit determination rules required by this regulation, and under those rules the plan determines its benefits first.

J. “Secondary plan” means a plan that is not a primary plan. If a person is covered by more than one secondary plan, the order of benefit determination rules of this regulation decide the order in which secondary plans benefits are determined in relation to each other. Each secondary plan shall take into consideration the benefits of the primary plan or plans and the benefits of any other plan which, under the rules of this regulation, has its benefits determined before those of that secondary plan.

K. “This plan” means, in a COB provision, the part of the group contract providing the health care benefits to which the COB provision applies and which may be reduced because of the benefits of other plans. Any other part of the group contract providing health care benefits is separate from this plan. A group contract may apply one COB provision to certain of its benefits (such as dental benefits), coordinating only with similar benefits, and may apply another COB provision to coordinate with other benefits.

Section 5 Use of Model COB Contract Provision A. Appendix A contains a model COB provision for use in group contracts. That use is subject to the provisions of Subsections B, C and D of this section and to the provisions of Section 6.

B. Appendix B is a plain language description of the COB process that explains to the covered person how carriers will implement coordination of benefits. It is not intended to replace or change the provisions that are set forth in the contract. Its purpose is to explain the process by which the two (or more) plans will pay for or provide benefits, how the benefit reserve is accrued and how the covered person may use the benefit reserve.

C. The COB provision (Appendix A) and the plain language explanation (Appendix B) do not have to use the specific words and format shown in Appendix A or Appendix B. Changes may be made to fit the language and style of the rest of the group contract or to reflect differences among plans that provide services, that pay benefits for expenses incurred and that indemnify. No substantive changes are permitted.

D. A COB provision may not be used that permits a plan to reduce its benefits on the basis that:

1. 1. Another plan exists and the covered person did not enroll in that plan;
   1. 2. A person is or could have been covered under another plan, except with respect to Part B of Medicare; or 3. A person has elected an option under another plan providing a lower level of benefits than another option that could have been elected.

E. No plan may contain a provision that its benefits are “always excess” or “always secondary” except in accord with the rules permitted by this regulation.

F. Under the terms of a closed panel plan, benefits are not payable if the covered person does not use the services of a closed panel provider, with the exceptions of medical emergencies and if there are allowable benefits available. In most instances, COB does not occur if a covered person is enrolled in two (2) or more closed panel plans and obtains services from a provider in one of the closed panel plans because the other closed panel plan (the one whose providers were not used) has no liability. However, COB may occur during the claim determination period when the covered person receives emergency services that would have been covered by both plans. Then the secondary plan must use the benefit reserve to pay any unpaid allowable expense. See Section 4A (6).

Section 6 Rules for Coordination of Benefits When a person is covered by two (2) or more plans, the rules for determining the order of benefit payments are as follows:

A. The primary plan must pay or provide its benefits as if the secondary plan or plans did not exist.

B. A plan that does not contain a coordination of benefits provision that is consistent with this regulation is always primary. There is one exception: coverage that is obtained by virtue of membership in a group and designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by the contract holder. Examples of these types of situations are major medical coverages that are superimposed over base plan hospital and surgical benefits, and insurance-type coverages that are written in connection with a closed panel plan to provide out of network benefits.

C. A plan may consider the benefits paid or provided by another plan only when it is secondary to that other plan.

D. Order-of-Benefit Determination The first of the following rules that describes which plan pays its benefits before another plan is the rule to use:

1. 1. Non-Dependent or Dependent The plan that covers the person other than as a dependent, for example as an employee, member, subscriber or retiree, is primary and the plan that covers the person, as a dependent is secondary. However, if the person is a Medicare beneficiary, and, as a result of the provisions of Title XVIII of the Social Security Act and implementing regulations, Medicare is:
   1. a. Secondary to the plan covering the person as a dependent; and b. Primary to the plan covering the person as other than a dependent (e.g. a retired employee), then the order of benefits is reversed so that the plan covering the person as an employee, member, subscriber or retiree is secondary and the other plan is primary.
   2. 2. Child Covered Under More Than One Plan
      1. a. The primary plan is the plan of the parent whose birthday is earlier in the year if:
         1. 1. The parents are married;
         2. 2. The parents are not separated (whether or not they ever have been married); or 3. A court decree awards joint custody without specifying that one parent has the responsibility to provide health care coverage.
      2. b. If both parents have the same birthday, the plan that has covered either of the parents longer is primary.
      3. c. If the specific terms of a court decree state that one of the parents is responsible for the child’s health care expenses or health care coverage and the plan of that parent has actual knowledge of those terms, that plan is primary. If the parent with financial responsibility has no coverage for the child’s health care services or expenses, but that parent’s spouse does, the spouse’s plan is primary.
      4. d. If the parents are separated (whether or not they ever were married) or are divorced, and there is no court decree allocating responsibility for the child’s health care services or expenses, the order of benefit determination among the plans of the parents and the parents’ spouses (if any) is:
         1. (1) The plan of the custodial parent;
         2. (2) The plan of the spouse of the custodial parent;
         3. (3) The plan of the noncustodial parent; and then (4) The plan of the spouse of the noncustodial parent.
   3. 3. Active or Inactive Employee The plan that covers a person as an employee who is neither laid off nor retired (or as that employee’s dependent) is primary. If the other plan does not have this rule and if, as a result, the plans do not agree on the order of benefits, this rule is ignored. Coverage provided an individual as a retired worker and as a dependent of that individual’s spouse who as an active worker will be determined under Subsection D(1). Also, see Appendix A.
   4. 4. Continuation Coverage If a person whose coverage is provided under a right of continuation pursuant to federal or state law and also is covered under another plan, the plan covering the person as an employee, member, subscriber or retiree (or as that person’s dependent) is primary and the continuation coverage is secondary.
      1. If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored.
   5. 5. Longer or Shorter Length of Coverage If the preceding rules do not determine the order of benefits, the plan that covered the person for the longer period of time is primary.
      1. a. To determine the length of time a person has been covered under a plan, two plans shall be treated as one if the covered person was eligible under the second within twenty-four (24) hours after the first ended.
      2. b. The start of a new plan does not include:
         1. (1) A change in the amount or scope of a plan’s benefits;
         2. (2) A change in the entity that pays, provides or administers the plan’s benefits; or (3) A change from one type of plan to another (such as, from a single employer plan to that of a multiple employer plan).
      3. c. The person’s length of time covered under a plan is measured from the person’s first date of coverage under that plan. If that date is not readily available for a group plan, the date the person first became a member of the group shall be used as the date from which to determine the length of time the person’s coverage under the present plan has been in force.
   6. 6. If none of the preceding rules determines the primary plan, the allowable expenses shall be shared equally between the plans.

Section 7 Procedure to be Followed by Secondary Plan A. When a plan is secondary, it shall reduce its benefits so that the total benefits paid or provided by all plans during a claim determination period are not more than 100 percent of total allowable expenses. The secondary plan shall calculate its savings by subtracting the amount that it paid as a secondary plan from the amount it would have paid had it been primary. These savings shall be recorded as a benefit reserve for the covered person and shall be used by the secondary plan to pay any allowable expenses, not otherwise paid, that are incurred by the covered person during the claim determination period. As each claim is submitted, the secondary plan must:

1. 1. Determine its obligation, pursuant to its contract;
   1. 2. Determine whether a benefit reserve has been recorded for the covered person; and 3. Determine whether there are any unpaid allowable expenses during that claim determination period.
      1. If there is a benefit reserve, the secondary plan shall use the covered person’s recorded benefit reserve to pay up to 100 percent of total allowable expenses incurred during the claim determination period. At the end of the claim determination period, the benefit reserve returns to zero. A new benefit reserve must be created for each new claim determination period.

B. The benefits of the secondary plan shall be reduced when the sum of the benefits that would be payable for the allowable expenses under the secondary plan in the absence of this COB provision and the benefits that would be payable for the allowable expenses under the other plans, in the absence of provisions with a purpose like that of this COB provision, whether or not a claim is made, exceeds the allowable expenses in a claim determination period. In that case, the benefits of the secondary plan shall be reduced so that they and the benefits payable under the other plans do not total more than the allowable expenses.

1. 1. When the benefits of a plan are reduced as described above, each benefit is reduced in proportion. It is then charged against any applicable benefit limit of the plan.
   1. 2. The requirements of Paragraph B(1) do not apply if the plan provides only one benefit, or may be altered to suit the coverage provided.

Section 8 Notice to Covered Persons A plan shall, in its explanation of benefits provided to covered persons, include the following language: “If you are covered by more than one health benefit plan, you should file all your claims with each plan.” Section 9 Miscellaneous Provisions A. A secondary plan that provides benefits in the form of services may recover the reasonable cash value of the services from the primary plan, to the extent that benefits for the services are covered by the primary plan and have not already been paid or provided by the primary plan. Nothing in this provision shall be interpreted to require a plan to reimburse a covered person in cash for the value of services provided by a plan that provides benefits in the form of services.

1. 1. A plan with order of benefit determination rules that comply with this regulation (complying plan) may coordinate its benefits with a plan that is “excess” or “always secondary” or that uses order of benefit determination rules that are inconsistent with those contained in this regulation (noncomplying plan) on the following basis:
   1. a. If the complying plan is the primary plan, it shall pay or provide its benefits first;
      1. b. If the complying plan is the secondary plan, it shall, nevertheless, pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the complying plan were the secondary plan. In such a situation, the payment shall be the limit of the complying plan’s liability; and c. If the noncomplying plan does not provide the information needed by the complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan shall assume that the benefits of the noncomplying plan are identical to its own, and shall pay its benefits accordingly. If, within two (2) years of payment, the complying plan receives information as to the actual benefits of the noncomplying plan, it shall adjust payments accordingly.
   2. 2. If the noncomplying plan reduces its benefits so that the covered person receives less in benefits than he or she would have received had the complying plan paid or provided its benefits as the secondary plan and the noncomplying plan paid or provided its benefits as the primary plan, and governing state law allows the right of subrogation set forth below, then the complying plan shall advance to or on behalf of the covered person an amount equal to the difference.
   3. 3. In no event shall the complying plan advance more than the complying plan would have paid had it been the primary plan less any amount it previously paid for the same expense or service. In consideration of the advance, the complying plan shall be subrogated to all rights of the covered person against the noncomplying plan. The advance by the complying plan shall also be without prejudice to any claim it may have against a noncomplying plan in the absence of subrogation.

B. COB differs from subrogation. Provisions for one may be included in health care benefits contracts without compelling the inclusion or exclusion of the other.

C. If the plans cannot agree on the order of benefits within thirty (30) calendar days after the plans have received all of the information needed to pay the claim, the plans shall immediately pay the claim in equal shares and determine their relative liabilities following payment, except that no plan shall be required to pay more than it would have paid had it been primary. Section 10 Effective Date for Existing Contracts A. This regulation is applicable to every group contract that provides health care benefits and that is issued on or after the effective date of this regulation.

B. A group contract that provides health care benefits and that was issued before the effective date of this regulation shall be brought into compliance with this regulation by the later of:

1. 1. The next anniversary date or renewal date of the group contract; or 2. The expiration of any applicable collectively-bargained contract pursuant to which it was written.

Section 11 Severability If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby. Section 12 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado Statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocations of license.

Section 13 Effective Date This regulation is effective September 1, 2010.

Section 14 History Regulation 78-6, was effective March 1, 1972.

Regulation 78-6, was amended and reenacted July 1, 1979. Regulation 78-6, was amended effective May 15, 1986.

Regulation 78-6 was repealed and replaced by Regulation 4-6-2, effective July 1, 1993. Regulation 4-6-2 was repealed and repromulgated effective July 1, 2002. Sections 2, 4(3)(g), 13 and 14 amended effective February 1, 2004. Amended Regulation, effective September 1, 2010.

APPENDIX A MODEL COB CONTRACT PROVISIONS COORDINATION OF THIS GROUP CONTRACT’S BENEFITS WITH OTHER BENEFITS This coordination of benefits (COB) provision applies when a person has health care coverage under more than one plan. “Plan” is defined below.

The order of benefit determination rules below determine which plan will pay as the primary plan. The primary plan that pays first pays without regard to the possibility that another plan may cover some expenses. A secondary plan pays after the primary plan and may reduce the benefits it pays so that payments from all group plans do not exceed 100% of the total allowable expense. DEFINITIONS A. A “plan” is any of the following that provides benefits or services for medical or dental care or treatment. However, if separate contracts are used to provide coordinated coverage for members of a group, the separate contracts are considered parts of the same plan and there is no COB among those separate contracts.

1. (1) “Plan” includes: group insurance, closed panel or other forms of group or group-type coverage (whether insured or uninsured); hospital indemnity benefits in excess of $200 per day; medical care components of group long-term care contracts, such as skilled nursing care; medical benefits under group or individual automobile contracts; and Medicare or other governmental benefits, as permitted by law.
   1. (2) “Plan” does not include: individual or family insurance; closed panel or other individual coverage (except for group-type coverage); amounts of hospital indemnity insurance of $200 or less per day; school accident type coverage, benefits for non-medical components of group long-term care policies; Medicare supplement policies; Medicaid policies and coverage under other governmental plans, unless permitted by law. Each contract for coverage under (1) or (2) is a separate plan. If a plan has two parts and COB rules apply only to one of the two, each of the parts is treated as a separate plan.

B. The order of benefit determination rules determine whether this plan is a “primary plan” or “secondary plan” when compared to another plan covering the person. When this plan is primary, its benefits are determined before those of any other plan and without considering any other plan’s benefits. When this plan is secondary, its benefits are determined after those of another plan and may be reduced because of the primary plan’s benefits.

C. “Allowable expense” means a health care service or expense, including deductibles and copayments, that is covered at least in part by any of the plans covering the person. When a plan provides benefits in the form of services, (for example an HMO) the reasonable cash value of each service will be considered an allowable expense and a benefit paid. An expense or service that is not covered by any of the plans is not an allowable expense. The following are examples of expenses or services that are not allowable expenses:

1. (1) If a covered person is confined in a private hospital room, the difference between the cost of a semi private room in the hospital and the private room, (unless the patient’s stay in a private hospital room is medically necessary in terms of generally accepted medical practice, or one of the plans routinely provides coverage for hospital private rooms) is not an allowable expense.
   1. (2) If a person is covered by 2 or more plans that compute their benefit payments on the basis of usual and customary fees, any amount in excess of the highest of the usual and customary fees for a specific benefit is not an allowable expense.
   2. (3) If a person is covered by 2 or more plans that provide benefits or services on the basis of negotiated fees, an amount in excess of the highest of the negotiated fees is not an allowable expense.
   3. (4) If a person is covered by one plan that calculates its benefits or services on the basis of usual and customary fees and another plan that provides its benefits or services on the basis of negotiated fees, the primary plan’s payment arrangements shall be the allowable expense for all plans.
   4. (5) The amount a benefit is reduced by the primary plan because a covered person does not comply with the plan provisions. Examples of these provisions are second surgical opinions and precertification of admissions.

D. “Claim determination period” is usually a calendar year, but a plan may use some other period of time that fits the coverage of the group contract. A person is covered by a plan during a portion of a claim determination period if that person’s coverage starts or ends during the claim determination period. However, it does not include any part of a year during which a person has no coverage under this plan, or before the date this COB provision or a similar provision takes effect.

E. “Closed panel plan” is a plan that provides health benefits to covered persons primarily in the form of services through a panel of providers that have contracted with either directly or indirectly or are employed by the plan, and that limits or excludes benefits for services provided by other providers, except in cases of emergency or referral by a panel member.

F. “Custodial parent” means a parent awarded custody by a court decree. In the absence of a court decree, it is the parent with whom the child resides more than one half of the calendar year without regard to any temporary visitation.

ORDER-OF-BENEFIT DETERMINATION RULES When two or more plans pay benefits, the rules for determining the order of payment are as follows:

A. The primary plan pays or provides its benefits as if the secondary plan or plans did not exist.

B. A plan that does not contain a coordination of benefits provision that is consistent with this regulation is always primary. There is one exception: coverage that is obtained by virtue of membership in a group that is designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by the contract holder. Examples of these types of situations are major medical coverages that are superimposed over base plan hospital and surgical benefits, and insurance type coverages that are written in connection with a closed panel plan to provide out-of-network benefits.

C. A plan may consider the benefits paid or provided by another plan in determining its benefits only when it is secondary to that other plan.

D. The first of the following rules that describes which plan pays its benefits before another plan is the rule to use.

1. (1) Non-Dependent or Dependent. The plan that covers the person other than as a dependent, for example as an employee, member, subscriber or retiree is primary and the plan that covers the person as a dependent is secondary. However, if the person is a Medicare beneficiary and, as a result of federal law, Medicare is secondary to the plan covering the person as a dependent; and primary to the plan covering the person as other than a dependent (e.g. a retired employee); then the order of benefits between the two plans is reversed so that the plan covering the person as an employee, member, subscriber or retiree is secondary and the other plan is primary.
   1. (2) Child Covered Under More Than One Plan. The order of benefits when a child is covered by more than one plan is:
      1. (a) The primary plan is the plan of the parent whose birthday is earlier in the year if: - The parents are married;
         1. - The parents are not separated (whether or not they ever have been married); or - A court decree awards joint custody without specifying that one party has the responsibility to provide health care coverage.

            If both parents have the same birthday, the plan that covered either of the parents longer is primary.

      2. (b) If the specific terms of a court decree state that one of the parents is responsible for the child’s health care expenses or health care coverage and the plan of that parent has actual knowledge of those terms, that plan is primary. This rule applies to claim determination periods or plan years commencing after the plan is given notice of the court decree.
      3. (c) If the parents are separated (whether or not they ever have been married) or are divorced, the order of benefits is:
         1. - The plan of the custodial parent;

            - The plan of the spouse of the custodial parent;

            - The plan of the noncustodial parent; and then - The plan of the spouse of the noncustodial parent.

   2. (3) Active or inactive employee. The plan that covers a person as an employee who is neither laid off nor retired, is primary. The same would hold true if a person is a dependent of a person covered as a retiree and an employee. If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored. Coverage provided an individual as a retired worker and as a dependent of an actively working spouse will be determined under the rule labeled D(1).
   3. (4) Continuation coverage. If a person whose coverage is provided under a right of continuation provided by federal or state law also is covered under another plan, the plan covering the person as an employee, member, subscriber or retiree (or as that person’s dependent) is primary, and the continuation coverage is secondary. If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored.
   4. (5) Longer or shorter length of coverage. The plan that covered the person as an employee, member, subscriber or retiree longer is primary.
   5. (6) If the preceding rules do not determine the primary plan, the allowable expenses shall be shared equally between the plans meeting the definition of plan under this regulation. In addition, this plan will not pay more than it would have paid had it been primary. EFFECT ON THE BENEFITS OF THIS PLAN

A. When this plan is secondary, it may reduce its benefits so that the total benefits paid or provided by all plans during a claim determination period are not more than 100 percent of total allowable expenses. The difference between the benefit payments that this plan would have paid had it been the primary plan, and the benefit payments that it actually paid or provided shall be recorded as a benefit reserve for the covered person and used by this plan to pay any allowable expenses, not otherwise paid during the claim determination period. As each claim is submitted, this plan will:

1. (1) Determine its obligation to pay or provide benefits under its contract;
   1. (2) Determine whether a benefit reserve has been recorded for the covered person; and (3) Determine whether there are any unpaid allowable expenses during that claims determination period.

      If there is a benefit reserve, the secondary plan will use the covered person’s benefit reserve to pay up to 100% of total allowable expenses incurred during the claim determination period. At the end of the claim determination period, the benefit reserve returns to zero. A new benefit reserve must be created for each new claim determination period.

B. If a covered person is enrolled in two or more closed panel plans the following coordination of benefits rules will apply:

1. (1) COB does not occur if the enrollee did not go to either plan’s closed panel, unless there is a covered benefit (i.e. medical emergency, etc.).
   1. (2) The two plans will coordinate benefits for covered services that are covered services for both plans (i.e. emergency services, services from providers that are participating in both plans, etc.).
   2. (3) If the covered person goes to the primary plan’s closed panel providers for covered services, the secondary carrier shall coordinate benefits only to the extent that there are benefits or reserves available.
   3. (4) If the primary closed panel has no liability because the covered person did not use the closed panel providers, but the covered person used the secondary closed panel providers, the secondary plan will pay benefits as though they are primary. RIGHT TO RECEIVE AND RELEASE NEEDED INFORMATION Certain facts about health care coverage and services are needed to apply these COB rules and to determine benefits payable under this plan and other plans. [Organization responsibility for COB administration] may get the facts it needs from or give them to other organizations or persons for the purpose of applying these rules and determining benefits payable under this plan and other plans covering the person claiming benefits. [Organization responsibility for COB administration] need not tell, or get the consent of, any person to do this. Each person claiming benefits under this plan must give [Organization responsibility for COB administration] any facts it needs to apply those rules and determine benefits payable.

FACILITY OF PAYMENT A payment made under another plan may include an amount that should have been paid under this plan. If it does, [Organization responsibility for COB administration] may pay that amount to the organization that made that payment. That amount will then be treated as though it were a benefit paid under this plan. [Organization responsibility for COB administration] will not have to pay that amount again. The term “payment made” includes providing benefits in the form of services, in which case “payment made” means reasonable cash value of the benefits provided in the form of services. RIGHT OF RECOVERY If the amount of the payments made by [Organization responsibility for COB administration] is more than it should have paid under this COB provision, it may recover the excess from one or more of the persons it has paid or for whom it has paid; or any other person or organization that may be responsible for the benefits or services provided for the covered person. The “amount of the payments made” includes the reasonable cash value of any benefits provided in the form of services. APPENDIX B CONSUMER EXPLANATORY BOOKLET COORDINATION OF BENEFITS IMPORTANT NOTICE This is a summary of only a few of the provisions of your health plan to help you understand coordination of benefits, which can be very complicated. This is not a complete description of all of the coordination rules and procedures, and does not change or replace the language contained in your insurance contract, which determines your benefits.

Double Coverage It is common for family members to be covered by more than one health care plan. This happens, for example, when a husband and wife both work and choose to have family coverage through both employers.

When you are covered by more than one group health plan, state law permits your carriers to follow a procedure called “coordination of benefits” to determine how much each should pay when you have a claim. The aim is to make sure that the combined payments of all plans do not add up to more than your covered health care expenses.

Coordination of benefits (COB) is complicated, and covers a wide variety of circumstances. This is only an outline of some of the most common ones. If your situation is not described, read your evidence of coverage or contact your state insurance department.

Primary or Secondary? You will be asked to identify all the plans that cover family members. We need this information to determine whether we are “primary” or “secondary.” The primary plan always pays first. Any plan which does not contain your state’s coordination of benefits rules will always be primary. When This Plan is Primary If you or a family member are covered under another plan in addition to this one, we will be primary when; Your Own Expenses The claim is for your own health care expenses, unless you are covered by Medicare and both you and your spouse are retired.

1. Your Spouse’s Expenses The claim is for your spouse, who is covered by Medicare, and you are not both retired. Your Child’s Expenses - The claim is for the health care expenses of a child covered by this plan and your birthday is earlier in the year than your spouse’s. This is known as the “birthday rule” ;
   1. or - you are not married and you have informed us of a court decree that makes you responsible for the child’s health care expenses;
      1. or - there is no court decree, but you have custody of the child. Other Situations We will be primary when any other provisions of state or federal law require us to be. How We Pay Claims When We Are Primary When we are the primary plan, we will pay the benefits provided by your contract, just as if you had no other coverage.

How We Pay Claims When We Are Secondary We will be secondary whenever the rules do not require us to be primary. When we are the secondary plan, we do not pay until after the primary plan has paid its benefits. We will then pay part or all of the allowable expenses left unpaid. An “allowable expense” is a health care service or expense covered by one of the plans, including copayments and deductibles. - If there is a difference between the amount the plans allow, we will base our payment on the higher amount. However, if the primary plan has a contract with the provider, our combined payments will not be more than the contract calls for. Health maintenance organizations (HMO) and preferred provider organizations (PPO) usually have contracts with their providers.

1. - We will determine our payment by subtracting the amount the primary plan paid from the amount we would have paid if we had been primary. We will use any savings to pay the balance of any unpaid allowable expenses covered by either plan. - If the primary plan covers similar kinds of health care, but allows expenses that we do not cover, we will pay for those items as long as there is a balance in your benefit reserve, as explained below.
   1. - We will not pay an amount the primary plan didn’t cover because you didn’t follow its rules and procedures. For example, if your plan has reduced its benefit because you did not obtain pre certification, we will not pay the amount of the reduction, because it is not an allowable expense.

Benefit Reserve When we are secondary we often will pay less than we would have paid if we had been primary. Each time we “save” by paying less, we will put that savings into a benefit reserve. Each family member covered by this plan has a separate benefit reserve.

1. - We use the benefit reserve to pay allowable expenses that are covered only partially by both plans. To obtain a reimbursement, you must show us what the primary plan has paid so we can calculate the savings.
   1. - To make sure you receive the full benefit or coordination, you should submit all claims to each of your plans.

      - Savings can build up in your reserve for one year. At the end of the year any balance is erased, and a fresh benefit reserve begins for each person the next year as soon as there are savings on their claims.

Questions About Coordination of Benefits? Colorado Division of Insurance 1560 Broadway, Ste 850 Denver, CO 80202 Phone Number: 303-894-7490 or 1-800-930-3745 Regulation 4-6-3 CONCERNING COVERCOLORADO STANDARDIZED NOTICE FORM AND ELIGIBILITY REQUIREMENTS Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-8-520, C.R.S.

Section 2 Scope and Purpose The purpose of this amended regulation is to specify standardized notice requirements to be used to notify individuals of their eligibility for CoverColorado. Section 3 Applicability This regulation applies to all carriers offering health benefit plans to residents of Colorado. Section 4 Definitions A. "Carrier" shall have the same meaning as set forth in § 10-16-102 (8), C.R.S.

B. “Federally eligible individual” shall have the same meaning as defined in §10-16-105.5(1), C.R.S. Section 5 Rules A. Notification Requirements for Individuals with Adverse Underwriting Decisions

1. 1. In order to comply with § 10-8-521, C.R.S., all carriers giving notice to an applicant or insured of one or more of the following adverse underwriting determinations shall be required to give notice to the applicant or insured that he or she may be eligible for coverage under CoverColorado. Dependents of participants are also eligible for coverage under the program. The adverse underwriting decisions which require the carrier to notify the applicant/insured are:
   1. a. The applicant has been rejected or refused a health benefit plan because of the medical condition or history of the applicant; or b. The application was accepted, but the premium rate for insurance exceeds the rate available through CoverColorado;
      1. c. Coverage will be reduced, limited by a restrictive rider or by the exclusion of coverage for a pre-existing condition for longer than six months; or d. Individual has a history of or medical condition that is on the presumptive list adopted by the CoverColorado Board.
   2. 2. Carriers shall be required to complete the CoverColorado Notice Form for an adverse underwriting determination listed above. Carriers may print the CoverColorado Notice Form on their own stationery but shall use the order, format and content of the CoverColorado Notice Form, as prescribed by the Commissioner of Insurance.
   3. 3. Insurers shall inform individuals they may be eligible for participation in the plan, without first requiring application to a carrier for health coverage, if a licensed physician has diagnosed the individual with a medical condition that is on the list of presumptive medical conditions established by the CoverColorado Board of Directors.

B. Elements of the CoverColorado Notice Form for Adverse Underwriting Decisions The elements of notification as determined by the Commissioner, which shall be given to individuals with adverse underwriting decisions are:

1. Applicant/Insureds:
   1. 1. Name.
   2. 2. Policy number (if applicable).
   3. 3. Reasons for notice: rejection of coverage, health rate higher than the rate available through CoverColorado or coverage that will be reduced by a restrictive rider or by excluding coverage for a pre-existing condition longer than six months or involuntarily terminated for reasons other than nonpayment of premium.
   4. 4. That the individual and dependents are eligible for the health care coverage through CoverColorado.
   5. 5. Name, address, contact person, and telephone number of CoverColorado Administrative Office to which interested persons should be referred.
   6. 6. Name and telephone number of underwriter or other contact at the carrier’s office.
   7. 7. A statement that the applicant may receive information about the available CoverColorado benefits and exclusions by contacting the CoverColorado Administrative Office.

C. Notification Requirements for Federally Eligible Individuals Individuals who meet the definition of a federally eligible individual under §10-16-105.5, C.R.S., are automatically eligible for CoverColorado. A dependent of a federally eligible individual shall also be eligible for coverage under CoverColorado if the dependent satisfies the definition of “dependent” under § 10-16-102(14) C.R.S.

1. 1. When a termination of coverage results in a federally eligible individual, the group carrier shall provide notice to the individual as specified in paragraph E. Notice, to the extent practicable, shall be provided at a time consistent with notice required for certification of creditable coverage.
   1. 2. When an individual carrier receives an application for coverage from a federally eligible individual, the individual carrier shall provide notice to the individual as specified in paragraph E.

D. Elements of the CoverColorado Notice Form for Federally Eligible Individuals The elements of notification as determined by the Commissioner, which shall be given to federally eligible individuals:

1. Applicant/Insureds:
   1. 1. Name.
   2. 2. Policy number (if applicable).
   3. 3. Notice that the individual and dependents, if applicable, may qualify for health insurance from CoverColorado as a federally eligible individual.
   4. 4. Name, address, contact person, and telephone number of CoverColorado Administrative Office to which interested persons should be referred.
   5. 5. A statement that the applicant may receive information about the available CoverColorado benefits and exclusions by contacting the CoverColorado Administrative Office. Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license. Among others, the penalties provided for in §10-3-1108, C.R.S. may be applied. Section 8 Effective Date This regulation is amended effective February 1, 2010.

Section 9 History New Regulation 91-3 effective April 1, 1991.

Regulation 91-3 was renumbered 4-6-3, effective June 1, 1992. Amended effective April 1, 1994.

Amended effective November 1, 1997.

Amended effective September 1, 2000.

Emergency Regulation 01-E-1, effective January 1, 2002. Amended effective February 1, 2002.

Amended Regulation 4-6-3, effective February 1, 2010.

Regulation 4-6-5 CONCERNING SMALL EMPLOYER GROUP HEALTH BENEFIT PLANS, THE BASIC AND STANDARD HEALTH BENEFIT PLANS, AND PREVENTIVE SERVICES Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Rules Section 5 Incorporated Materials Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, 10-16-105(7.2), 10-16-108.5(8), and 10-16-109, C.R.S. Section 2 Scope and Purpose The purpose of the amendment to this regulation is to adopt recommendations from the Health Benefit Plan Advisory Committee for changes to the basic and standard health benefit plans required to be offered to small employer groups and which are used for the purpose of conversion from group coverage as well as to incorporate other changes necessary for compliance with Colorado law. This regulation specifies the requirements for the basic and standard health benefit plans as well as other requirements for small employer carriers.

Section 3 Applicability This regulation shall apply to all small employer carriers as defined in § 10-16-102(41), C.R.S., and to all carriers required to provide conversion products pursuant to § 10-16-108, C.R.S. Section 4 Rules A. Plans

1. 1. Basic Plan. The form and content of the basic health benefit plan may be one or more of the three plan design options as appended to this regulation and shall constitute the basic health benefit plan design pursuant to § 10-16-105(7.2), C.R.S. At least one of these three plan design options, two of which are high deductible, HSA-qualified plan options, shall be required for use in Colorado’s small employer group market pursuant to § 10-16- 105(7.3), C.R.S., and as conversion coverage pursuant to § 10-16-108, C.R.S. However, if the carrier chooses to offer more than one basic health benefit plan design, it shall offer all of its basic plan options to every small employer that expresses an interest in the basic health benefit plan or to those individuals purchasing a basic conversion plan.
   1. 2. Standard Plan. The form and content of the standard health benefit plan, as appended to this regulation, shall constitute the standard health benefit plan required for use in Colorado's small employer group market pursuant to § 10-16-105(7.3), C.R.S., and for use as conversion coverage pursuant to § 10-16-108, C.R.S.

B. The basic and standard health benefit plans shall be identified as specified below.

1. 1. Each small employer carrier shall title and market its basic health benefit plan as follows: "[Carrier name] [Type of plan (i.e., Indemnity, Preferred Provider or HMO) (Basic Limited Mandate Health Benefit Plan, Basic HSA Health Benefit Plan or Basic HSA Limited Mandate Health Benefit Plan)] for Colorado".
   1. 2. Each small employer carrier shall title and market the standard health benefit plan as follows: "[Carrier name] [Type of plan (i.e., Indemnity, Preferred Provider, or HMO)] Standard Health Benefit Plan for Colorado".

C. A small employer carrier shall actively market the basic and standard health benefit plans to small employers in this state.

D. In marketing the basic and standard health benefit plans to small employers, a small employer carrier shall use at least the same sources and methods of distribution that it uses to market other health benefit plans to small employers. Any producer authorized by a small employer carrier to market health benefit plans to small employers in the state shall also be authorized to market the basic and standard health benefit plans.

E. Disclosure Statement.

1. 1. The following disclosure statement, prominently displayed in bold face capital letters no smaller than 14 point font for printed materials or in a clear and conspicuous manner for printed materials, electronic or internet-based communications shall appear on all small employer marketing materials (except the Colorado Health Benefit Plan Description Form pursuant to Colorado Insurance Regulation 4-2-20), the Colorado Small Group Uniform Employee Application form, small employer renewal notices, and on all written refusals to insure or issue a policy that are related to health coverage for a business group of one. "Colorado insurance law requires all carriers in the small group market to issue any health benefit plan it markets in Colorado to small employers of 2-50 employees, including a basic or standard health benefit plan, upon the request of a small employer to the entire small group, regardless of the health status of any of the individuals in the group. Business groups of one cannot be rejected under a basic or standard health benefit plan during open enrollment periods as specified by law." 2. "Clear and conspicuous" means with respect to a disclosure that the disclosure is reasonably understandable and designed to call attention to the nature and significance of the information it contains. A disclosure is considered designed to call attention to the nature and significance of the information in it if the carrier:
   1. a. Uses a typeface and type size that are easy to read;
      1. b. Provides wide margins and ample line spacing;
      2. c. Uses boldface, underscoring, capitals or italics for key words and phrases; and d. In a form that combines the disclosure with other information, uses a plain-language heading to call attention to the disclosure portion of the document and uses a type size that is greater than the type size predominantly used in the rest of the document or uses style and graphic devices, such as shading or sidebars.
   2. 3. If a disclosure is provided on a web page, the carrier shall design its disclosure to call attention to the nature and significance of the information in it. For example, the carrier shall use text or visual cues to encourage scrolling down the page, if necessary, to view the entire disclosure. The carrier shall ensure that other elements on the web site (such as text, graphics, hyperlinks or sound) do not distract attention from the disclosure, and the carrier either:
      1. a. Places the disclosure on a screen that consumers frequently access, such as a page on which transactions are conducted; or b. Places a link on a screen that consumers frequently access, such as a page on which transactions are conducted, that connects directly to the disclosure and is labeled appropriately to convey the importance, nature and relevance of the disclosure.

F. Except as specified in § 10-16-105.2(3), C.R.S., a small employer carrier shall offer the basic and standard health benefit plans along with all of its other small group plans to any small employer that applies for or makes an inquiry regarding health coverage from the small employer carrier. The offer may be provided directly to the small employer or delivered through a producer. The offer shall be in writing and shall include information as required by § 10-16-105(5), C.R.S.

G. Quotes.

1. 1. A small employer carrier shall provide a price quote to a small employer (directly or through an authorized producer) within five (5) business days of receiving all information necessary to provide a requested quote. Each price quote shall be calculated using the carrier’s filed rate, as defined in Colorado Insurance Regulation 4-6-7.
   1. 2. A small employer carrier shall notify a small employer (directly or through an authorized producer) within five (5) business days of receiving a request for a price quote if any additional information is needed. If a small employer carrier provides a price quote prior to receiving all information necessary to calculate any premium adjustments allowed under § 10-16-105(8.5)(a), C.R.S., that quote shall be the filed rate. The quote shall include a statement indicating that the rate is not final, and once all information is received, the rate will be recalculated using rating factors allowable by law, and may vary from the initial price quote.
   2. 3. A price quote shall be provided without requiring verification of the eligibility of the small group, including business groups of one. The fact that a price quote has been issued shall not prevent the small employer carrier from verifying the group’s eligibility before issuing the coverage.
   3. 4. A small employer carrier shall not apply more stringent or detailed requirements related to the price quote or application process for the basic and standard health benefit plans than are applied for other small group health benefit plans offered by the small employer carrier, except as allowed for underwriting business groups of one.
   4. 5. Quotes for the basic and standard health benefit plans shall include quotes for each type of basic and standard health benefit plan the carrier markets (e.g., PPO, indemnity, HMO, HSA-qualified).

H. If a small employer carrier denies coverage to a business group of one for any of its health benefit plans on the basis of risk characteristics, the denial shall be in writing and shall state with specificity the reasons for the denial (subject to any restrictions related to the confidentiality of medical information). The written denial shall be accompanied by a written explanation of the availability of the basic and standard health benefit plans from the small employer carrier. The explanation shall include at least the following:

1. 1. A copy of the Colorado Health Benefit Plan Description Form for each basic and standard health benefit plan offered by the small employer carrier;
   1. 2. A price quote, in the manner required by subsection 4.G. of this regulation, for each such plan if the business group of one is in its open enrollment period or a sample price quote reflecting current rates if the business group of one is not in its open enrollment period. In the case of a sample price quote, the small employer carrier shall disclose that the actual rates may be different than the sample rates if there are changes in the small employer carrier’s filed rates or application of rating factors; and 3. Information describing how the business group of one can enroll in such plans. The explanation shall be provided directly to the business group of one or through an authorized producer within the time frames provided in paragraphs G.1. and G.2.

I. A small employer carrier shall establish and maintain a toll-free telephone service to provide information to small employers regarding the availability of small employer health benefit plans in this state. The service shall provide information to callers on how to apply for coverage from the carrier. The information may include the names and phone numbers of producers located geographically proximate to the caller or other such information that is reasonably designed to assist the caller to locate an authorized producer or otherwise apply for coverage through the carrier.

J. A small employer carrier may not require, as a condition for the offer or sale of a basic or standard health benefit plan, that the small employer purchase or qualify for any other product, service, or association.

K. A small employer carrier shall conform to the renewability requirements specified in § 10-16-201.5, C.R.S.

L. Small employer carriers shall elicit, at the time of application, information from applicants necessary to determine whether or not small group laws apply pursuant to § 10-16-105.2(1), C.R.S. If a small employer carrier fails to elicit this information, it shall be deemed to be on notice of any information that could reasonably have been attained if the small employer carrier had done so.

M. Annual Report.

1. 1. A small employer carrier shall file annually, in the manner specified by the Commissioner, information related to the health benefit plans issued by the small employer carrier to small employers in this state. This information shall include, but is not limited to:
   1. a. The number of small employers that were issued health benefit plans in the previous calendar year;
      1. b. The number of small employers that were issued the basic health benefit plan and the standard health benefit plan in the previous calendar year;
      2. c. The number of individuals issued coverage under small employer plans who were uninsured for at least three (3) months prior to their effective date of coverage;
      3. d. The total number of individuals, separated as to employees and dependents, insured under basic and standard health benefit plans in the previous calendar year; and e. The total number of individuals, separated as to employees and dependents, insured under all small employer health benefit plans.
   2. 2. The information described in paragraph M.1. shall be filed no later than February 15th of each year in the manner specified by the Commissioner.

Section 5 Incorporated Materials The Immunization Schedules published by Centers for Disease Control and Prevention shall mean the Childhood Schedule, the Adolescent and Teen Schedule, and the Adult Schedule as exists on the effective date of this regulation and does not include later amendments to or editions of the Immunization Schedules. A copy of the Immunization Schedules may be examined during regular business hours at the Colorado Division of Insurance, 1560 Broadway, Suite 850, Denver, Colorado, 80202. A certified copy of the Immunization Schedules may be requested from the Center for Disease Control and Prevention (www.cdc.gov). A charge for certification or copies may apply. Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected. Section 7 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspension or revocation of licenses or certificates of authority. Among others, the penalties provided for in § 10-3-1108, C.R.S., may be applied.

Section 8 Effective Date This amended regulation is effective on October 1, 2011. Section 9 History Original regulation effective January 1, 1995.

Amended regulation adopted recommended changes from Health Benefit Plan Advisory Committee to be effective January 1, 1996.

Emergency amendment for exclusion of work related illnesses and injuries effective January 1, 1996. Amended regulation adopting emergency amendment as permanent effective April 1, 1996. Amended regulation adopting recommended changes from the Health Benefit Plan Advisory Committee effective January 1, 1997.

Amended regulation incorporating changes required by 1997 legislation and recommendations of the Health Benefit Plan Advisory Committee effective January 1, 1998. Amended regulation incorporating recommendations from the Health Benefit Plan Advisory Committee effective January 1, 1999.

Amended regulation incorporating recommendations from the Health Benefit Plan Advisory Committee effective January 1, 2000.

Amended regulation, correcting errors in the Basic Indemnity Out-of-Pocket Maximum, the Basic PPO In- network Family Coinsurance, and the Standard Indemnity and PPO Maternity benefit. Corrections effective January 1, 2000.

Amended regulation incorporating recommendations from the Health Benefit Plan Advisory Committee effective January 1, 2001.

Amended regulation incorporating recommendations from the Health Benefit Plan Advisory Committee effective January 1, 2002.

Emergency regulation, effective January 1, 2003.

Amended regulation effective February 1, 2003.

Amended regulation effective January 1, 2004.

Emergency Regulation 04-E-4 effective July 1, 2004.

Emergency Regulation 04-E-9 effective September 29, 2004. Amended regulation effective November 1, 2004.

Amended regulation effective January 1, 2006.

Amended regulation effective January 1, 2008.

Attachment 1 amended effective March 1, 2008.

Emergency Regulation 08-E-12 effective January 1, 2009. Amended regulation effective February 1, 2009.

Amended regulation effective January 1, 2010.

Amended regulation effective May 1, 2010.

Emergency Regulation 11-E-02 effective November 1, 2010. Amended regulation effective February 1, 2011.

Amended regulation effective October 1, 2011.

BASIC AND STANDARD HEALTH BENEFIT PLAN POLICY REQUIREMENTS FOR THE STATE OF COLORADO Colorado Division of Insurance Effective January 1, 2012 1. The basic health benefit plan as defined by the Commissioner pursuant to § 10-16-105(7.2)(b), C.R.S., for an indemnity, preferred provider organization (PPO), and health maintenance organization

1. (HMO) plan shall include the specific benefits and coverages outlined in one of the attached tables labeled "Basic Limited Mandate Health Benefit Plan", "Basic HSA Health Benefit Plan", or "Basic HSA Limited Mandate Health Benefit Plan".

2. The standard health benefit plan for an indemnity, PPO, and HMO plan shall include the specific benefits and coverages outlined in the attached table labeled "Standard Health Benefit Plan".

3. All provisions of Title 10, Article 16 of the Colorado Revised Statutes that apply to small employer group plans shall apply to the basic and standard health benefit plans. All other provisions of Title 10 which apply to group sickness and accident insurers, nonprofit health and hospital service corporations, and health maintenance organizations, and all rules related to those provisions, as they relate to small employer group plans, shall also apply to the basic and standard health benefit plans.

4. Modifications to the basic and standard health benefit plans (unless specifically stated otherwise in statute) shall apply to any basic or standard health benefit plan, whether group or conversion, when issued or renewed on or after the effective date specified above.

5. All basic and standard health benefit plans shall also comply with the following requirements:

1. A. Balance Billing: In-network providers are prohibited from balance billing individuals covered under the basic or standard health benefit plan. "Balance billing" refers to the practice whereby a provider bills an individual for the difference between the amount the provider normally charges for a service and the amount the carrier, policy, or contract recognizes as the allowable charge or negotiated price for the services delivered. In the case of indemnity plans and out-of-network PPO plan benefits, carriers shall alert those covered under the basic and standard health benefit plans to the fact that their provider is not prohibited from balance billing except as proscribed in § 10-16-704, C.R.S. Consumers should be encouraged to discuss the issue with their provider.
   1. B. Benefit Modifications: The form and level of coverages specified in the tables labeled "Basic Limited Mandate Health Benefit Plan", "Basic HSA Health Benefit Plan", "Basic HSA Limited Mandate Health Benefit Plan" and "Standard Health Benefit Plan" may be expanded to add additional coverage through a rider or endorsement at the option of the policyholder only.
   2. C. Cost Containment: In their basic and standard health benefit plans, carriers shall disclose whether or not, and to what extent, they use or require the use of the following cost containment approaches: utilization review; second surgical opinions; pre-admission authorization and pre-certification; use of non-physician primary care providers; alternative dispute resolution; and managed care. For PPO plans, accumulations for deductibles and out-of-pocket maximums are calculated separately for in-network and out-of-network. Carriers shall disclose deductible and out-of-pocket maximum calculations on the Colorado Health Benefit Plan Description Form as required in Colorado Insurance Regulation 4-2-20.
      1. Use of gatekeepers is encouraged but not required. Carriers shall offer the most managed care version of each indemnity, PPO, and/or HMO health benefit plan they offer in Colorado. A small employer carrier shall offer the same choice of networks for its basic and standard health benefit plans as it offers for all of its other small group health benefit plans (e.g., if a carrier markets to small employers both a PPO plan with a broad network and one with a limited network, it shall provide basic and standard PPO options using each of the networks).
   3. D. Eligibility: "Actively at work" and "non-confinement" provisions are prohibited.
   4. E. Employer Contribution and Participation Requirements: The employer contribution and participation requirements applied to the basic and standard health benefit plans shall be in compliance with § 10-16-105(7.4), C.R.S.
   5. F. Enrollment: To enroll an employee and dependents, the carrier shall require that:
      1. 1. Employers:
         1. a. Submit a written request for coverage;
         2. b. Provide information necessary to determine eligibility; and c. Agree to pay the required premium.
      2. 2. Eligible employees, on the Colorado Small Group Uniform Employee Application form made available by the employer:
         1. a. Submit a written request for coverage for himself/herself and any dependents; and b. Provide information necessary to determine eligibility, if it is required.
   6. G. Family Planning Services: Family planning services shall be included as a covered benefit under both the basic and standard health benefit plans. At a minimum, family planning services shall include maternity care, prenatal and postnatal care and counseling, treatment and screening as appropriate for sexually transmitted diseases, sterilization, contraceptives, and contraception counseling.* H. Out-of-pocket Maximum: All cost sharing (deductibles, coinsurance, copays), unless specifically noted otherwise, apply toward the annual out-of-pocket maximum. After the out-of-pocket maximum is satisfied, benefits are paid at 100%. PPO out-of-network, out- of-pocket maximum amounts are separate from the in-network, out-of-pocket maximum amounts.
   7. I. Primary Care Providers: Carriers may use non-physician providers, such as certified nurse practitioners and physician’s assistants, as primary care providers under the basic and standard health benefit plans. However, carriers are not required to include non-physician providers.
   8. J. Copays: All coverages that have any type of flat dollar copay are not subject to the deductible except for the Basic Limited Mandate Health Benefit Plan’s prescription drug deductible.
   9. K. Deductibles: None of the basic and standard health benefit plans that include deductibles provide fourth quarter carryover credit. PPO out-of-network deductibles are separate from in-network deductibles.
   10. L. Usual, Customary and Reasonable Determinations: For all basic and standard health benefit plans, each carrier shall use the same method of determining usual, customary and reasonable charge allowances as it uses for its most frequently sold non-basic, non- standard group health benefit plan in Colorado.

       * Infertility treatment and counseling, and abortion services shall be covered by a carrier under the basic and standard health benefit plans if such services are covered by the carrier under its most frequently sold non-basic, non-standard group health benefit plan in Colorado. Benefits, including deductibles and copayments, shall be provided in accordance with the appropriate level of benefits in the basic and standard health benefit plans based on the type and location of the services provided (e.g., office visit, lab, x-ray, etc.). [NOTE: This benefit grid has been formatted to more closely conform to the Colorado Health Benefit Plan Description Form. However, it does not reflect full compliance with that form as the intent is to provide carriers with a description of the plan benefits.] JANUARY 1, 2012 COLORADO BASIC LIMITED MANDATE HEALTH BENEFIT PLANS: INDEMNITY, PPO AND HMO PART A: TYPE OF COVERAGE PART B: SUMMARY OF BENEFITS PART C: LIMITATIONS AND EXCLUSIONS [NOTE: This benefit grid has been formatted to more closely conform to the Colorado Health Benefit Plan Description Form. However, it does not reflect full compliance with that form as the intent is to provide carriers with a description of the plan benefits.] JANUARY 1, 2012 COLORADO BASIC HSA HEALTH BENEFIT PLANS: INDEMNITY, PPO, AND HMO PART A: TYPE OF COVERAGE PART B: SUMMARY OF BENEFITS PART C: LIMITATIONS AND EXCLUSIONS [NOTE: This benefit grid has been formatted to more closely conform to the Colorado Health Benefit Plan Description Form. However, it does not reflect full compliance with that form as the intent is to provide carriers with a description of the plan benefits.] JANUARY 1, 2012 COLORADO BASIC HSA LIMITED MANDATE HEALTH BENEFIT PLANS: INDEMNITY, PPO, AND HMO PART A: TYPE OF COVERAGE PART B: SUMMARY OF BENEFITS PART C: LIMITATIONS AND EXCLUSIONS [NOTE: This benefit grid has been formatted to more closely conform to the Colorado Health Benefit Plan Description Form. However, it does not reflect full compliance with that form as the intent is to provide carriers with a description of the plan benefits.] JANUARY 1, 2012 COLORADO STANDARD HEALTH BENEFIT PLANS: INDEMNITY, PPO, AND HMO PART A: TYPE OF COVERAGE PART B: SUMMARY OF BENEFITS PART C: LIMITATIONS AND EXCLUSIONS Attachment 1 Covered Preventive Services Regulation 4-6-7 CONCERNING PREMIUM RATE SETTING FOR SMALL GROUP HEALTH PLANS Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Premium Rate Setting Section 6 Use of Composite Rates Section 7 Rate Filings and Actuarial Certifications Section 8 Enforcement Section 9 Severability Section 10 Effective Date Section 11 History Section 1 Authority This regulation is promulgated under the authority of § §10-1-109(1), 10-16-102(10)(b)(II), 10-16-104.9, 10-16-105(6.5), 10-16-105(7.2), 10-16-105(8)(f), 10-16-105(8.5) and 10-16-109, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to establish and implement rules for setting premiums for small group health benefit plans. This regulation concerns: applicability and scope of Colorado’s small group health rating laws; carriers’ obligations to provide coverage; premium rate setting; use of composite rates; rate filings; and actuarial certifications.

Section 3 Applicability This regulation shall apply to all small group carriers and health benefit plans subject to the small group laws of Colorado.

Section 4 Definitions A. “Filed rate” means the Index Rate as adjusted for plan design and the case characteristics of age, geographic location, and family size only. The “filed rate” does not include the Index Rate as further adjusted for any other case characteristic (See Section 5(A)(3) of this regulation).

B. "Metropolitan statistical area (MSA)" is a relatively freestanding area of the state determined by one or more large population nuclei, together with adjacent communities, that have a high degree of economic and social integration with the nuclei. Each MSA is not closely associated with another

1. MSA. An MSA is a statistical standard developed for use by the Federal Office of Management and Budget, following a set of officially published standards, including, but not limited to, the acceptable underlying population base.

C. "Premium rate," "rate" and "premium" mean all moneys paid by a small employer and eligible employees as a condition of receiving coverage from a carrier, including any fees or other contributions associated with obtaining or administering the health benefit plan.

D. “Primary metropolitan statistical area (PMSA)” is a possible subcategory of an MSA, which has a million or more persons living in that MSA. The PMSA consists of a large urbanized county or cluster of counties that demonstrate very strong internal economic and social links, in addition to close ties, to other portions of the larger area. Each PMSA is also determined by the Federal Office of Management and Budget following a set of officially published standards, including, but not limited to, the acceptable underlying population base.

E. "Qualified actuary" means an actuary who meets the requirements of Colorado Insurance Regulation 1-1-1.

F. “Renewed." A health benefit plan is deemed renewed upon the occurrence of the earliest of: the anniversary date of issue; or the date on which premium rates can be or are changed according to the terms of the plan; or the date on which benefits can be or are changed according to the terms of the plan.

G. “Wellness and prevention program” for the purposes of this regulation, shall have the same meaning as provided under § 10-16-136(7)(b), C.R.S.

Section 5 Premium Rate Setting A. Calculating Premium Rates Adjusted for Case Characteristics

1. 1. Index Rate - Each carrier offering a health benefit plan to groups in Colorado shall develop a single index rate for all small group plans it offers. This single index rate is identical to a community rate for the company’s universe of small group plans offered for new issue or renewal. It should be calculated using the experience for all small group plans. The premium rate charged during a rating period, applicable to all small employers, shall be based upon this index rate, adjusted for case characteristics and coverage as allowed in this Section 5.
   1. 2. Plan Design Adjustment - The Index Rate may be adjusted to reflect differences attributable to different plan designs. If the small employer carrier elects to make this adjustment, the small employer carrier should calculate a rate adjustment factor for each small group plan design. Differences in the rates for different benefit plans, for persons with the same case characteristics of age, geographic location and family size, shall be attributable to plan design only. Using this methodology, a carrier's rates for a plan with richer benefits than the Colorado Standard Health Benefit Plan should be higher than the rates for its Colorado Standard Health Benefit Plan, and a carrier's rates for a plan with leaner benefits than the Colorado Standard Health Benefit Plan should be lower than the rates for its Colorado Standard Health Benefit Plan.
   2. 3. Acceptable Case Characteristic Factor Categories - For all small employer policies carriers choosing to modify the unique index rate by the use of case characteristics must utilize one or more of the categories listed below. Carriers shall develop a rating factor for each category, which is actuarially based.
      1. a. Age - if a carrier uses age to calculate rates, then it shall use the following 12 mandatory age categories. Rates must be based on employee age only, not employee and spouse ages.

   Mandatory Age Categories Children ages newborn through age 19 (or through age 24 if the child is a full-time student covered as a dependent), excluding emancipated minors Emancipated minors and persons ages 20 through Age 25 through 29 Age 30 through 34 Age 35 through 39 Age 40 through 44 Age 45 through 49 Age 50 through 54 Age 55 through 59 Age 60 through 64 Age 65 and older:

   Medicare is primary payer Age 65 and older:

   Medicare is secondary payer

   1. b. Geographic Location - if a carrier uses geographic location to calculate rates, then it shall use the 9 mandatory categories listed below. In determining that these geographic location categories best serve the public interest, the commissioner considered the key issues of accessibility, availability, consumer choice and the cost of health care in all areas of the state. Public and consumer input was solicited, received, and evaluated. The commissioner determined that these area groupings best serve the public interest by maximizing consumer choice options and health care availability in all areas of the state at the lowest possible cost and will ensure that the rates charged are not excessive, inadequate or unfairly discriminatory. The appropriate population base for these categories is the base as determined by the federal government in establishing MSAs, except for the last two categories listed below. No MSA exists for these counties and consequently these counties were grouped by population size. Carriers may, with the prior written approval of the commissioner, establish one or more additional categories by further subdividing the last two categories. Rates must be based on the primary physical location of the small employer’s business, except that an employer with multiple business locations in separate geographic categories may be provided with separate rates for each physical business location. There cannot be a separate factor for a small employer’s out- of-state employees, if any. These individuals shall be rated as if they are working in the small employer’s primary physical business location. Mandatory Geographic Location Categories Boulder County (known as the Boulder-Longmont PMSA)

   Adams, Arapahoe, Broomfield, Denver, Douglas, and Jefferson counties (known as the Denver MSA)

   Weld County (known as the Greeley PMSA)

   El Paso County (known as the Colorado Springs MSA)

   Larimer County (known as the Fort Collins- Loveland MSA)

   Mesa County (known as the Grand Junction MSA)

   Pueblo County (known as the Pueblo MSA)

   Counties in Colorado with a population of 20,000 or fewer residents: Alamosa, Archuleta, Baca, Bent, Chaffee, Cheyenne, Clear Creek, Conejos, Costilla, Crowley, Custer, Dolores, Gilpin, Grand, Gunnison, Hinsdale, Huerfano, Jackson, Kiowa, Kit Carson, Lake, Las Animas, Lincoln, Mineral, Moffat, Otero, Ouray, Park, Phillips, Pitkin, Prowers, Rio Blanco, Rio Grande, Saguache, San Juan, San Miguel, Sedgwick, Washington, and Yuma counties. (Such counties may be grouped into one or more geographic location categories based on differences in medical costs of the carrier with the prior written approval of the Commissioner.)

   All other Colorado counties: Delta, Eagle, Elbert, Fremont, Garfield, La Plata, Logan, Montezuma, Montrose, Morgan, Routt, Summit, and Teller counties. (Such counties may be grouped into one or more geographic location categories based on differences in medical costs of the carrier with the prior written approval of the Commissioner.)

   1. PMSA = Primary Metropolitan Statistical Area MSA = Metropolitan Statistical Area
      1. (1) Geographic rating factors must be determined on the same basis, reflect the relative differences in expected costs, and produce rates that are not excessive, inadequate, or unfairly discriminatory in such geographic areas. For example, a geographic factor of 1.2 for the Colorado Springs MSA and a factor of 1.0 for the Denver MSA would imply that costs can reasonably be expected to be 20% higher in the Colorado Springs MSA than they are in the Denver MSA. All changes in the geographic rating factors must be supported on this basis.
         1. (2) Approval to subdivide categories eight and nine above into two or more subcategories must be obtained in advance. The material provided to support the subdivision(s) shall be based upon statistically-credible data using the Division of Insurance’s credibility standard and/or other actuarially-determined standards. The Division’s credibility standard is 2,000 life-years and 2,000 claims per year. (See Section 6(M) of Amended Colorado Insurance Regulation 4-2-11).
      2. c. Family Size - if a carrier uses family size to calculate rates, then it shall use the 4 mandatory categories listed below. If age is also used as a rating factor, rates must be based on employee age only, not employee and spouse ages. Mandatory Family Size Categories 1 adult 2 adults 1 adult plus any number of children who are dependents of the primary insured or for whom the primary insured is legally required to provide health insurance coverage.

   2 adults plus any number of children who are dependents of the primary insured or for whom the primary insured is legally required to provide health insurance coverage.

   1. d. Tobacco Use - If a carrier reflects tobacco usage in the calculation of rates, then it shall do so according to the following requirements:
      1. (1) The carrier shall provide a wellness and prevention program;
         1. (2) Any individual who participates in the program shall be given the lower rate;
         2. (3) Any rate adjustment attributable to an individual (and all similarly situated individuals) based upon tobacco usage shall be applied to that individual (and all similarly situated individuals), and shall not be distributed to the entire group; and, (4) The carrier shall use one of the following three allowable rate adjustments:
         3. (a) An increase of up to fifteen percent (15%) for tobacco use, pursuant to § 10-16-105(8.5)(a)(I)(B), C.R.S.;
         4. (b) A decrease of up to fifteen percent (15%) for nonuse of tobacco, pursuant to § 10-16-105(8.5)(a)(I)(B), C.R.S.; or, (c) A discount of up to ten percent (10%) for refraining from smoking for more than twelve (12) consecutive months prior to the effective date or renewal date of the small group policy, pursuant to § 10- 16-105(13)(c), C.R.S.
      2. e. Standard Industrial Classifications - If the carrier uses the standard industrial classifications to calculate rates, only one factor is permitted for each small group. No enrolled employee should be charged directly for any such adjustment.
      3. f. All rating adjustments due to the application of any of these case characteristics must be applied consistently in the calculation of all small employers’ rates. Any adjustments made due to standard industrial classification should be applied uniformly to the rates charged for all employees enrolled under each small group policy.
      4. g. All rate filings must contain adequate and acceptable detail information as to how each of the rating factors used for tobacco use and standard industrial classification is determined and the combined maximum and minimum effect of applying these rating factors.
      5. h. Health status and claims experience may not be used as case characteristics. A health questionnaire, requesting reasonable information, may be used to obtain information about the health status of group enrollees. However, the health questionnaire may not be used in any way to determine the premium rate or any rating factor that is used in the determination of the premium rate that is charged to the group, except as provided in Subparagraph (d) of this paragraph.
   2. 4. Limits on Certain Case Characteristic Adjustments - For all small group health benefit plans issued or renewed for a small employer on or after January 1, 2008, rating adjustments based on standard industrial classification shall not result in a rate that deviates from the carrier’s filed rate by more than a ten percent (10%) increase or a twenty-five percent (25%) decrease.
   3. 5. Limits on Renewal Rates - A small employer carrier may make an upward adjustment to a small employer’s renewal premium not to exceed fifteen percent annually due to standard industrial classification or tobacco use. The final rate is subject to the limits on rating adjustments specified under Section 5(A)(4) of this regulation.
   4. 6. Additional Premium Adjustments - Small employer groups may be subject to premium adjustment for health status of no more than 35% above the modified community rate, for a period of no more than twelve months, in certain instances. (See §10-16-105 (13)(a)(I) and §10-16-105(14)(a), C.R.S.) Adequate and acceptable detail information as to how the carrier determines the rating factor(s) for this adjustment should be included in each rate filing.
   5. 7. Wellness and Prevention Programs - A small employer carrier may make available wellness and prevention programs as provided for under Section 7B of Colorado Insurance Regulation 4-2-11.

B. Rating Period The rating period for all small group health plans shall be twelve (12) months unless:

1. 1. A small employer carrier specifies in its rate filings a different rating period, which shall be the same for all its small group health benefit plans issued or renewed in the same calendar month, pursuant to §10-16-105(8)(c)(II), C.R.S.; and 2. The small employer carrier clearly discloses in all its small employer solicitation and sales materials exactly what the different rating period is, pursuant to §10-16-105(5)(b), C.R.S.

C. Administrative and Other Fees Carriers and producers shall not charge any fees in addition to premium, except for amounts charged as necessary to recoup assessments paid for CoverColorado. Separate administrative, processing, renewal, enrollment, and other special charges are prohibited. Such charges must be built into the index rate and are not an allowable rate adjustment factor. Reasonable late payment penalties may be imposed by a small group carrier if the policy discloses the carrier’s right to, the amount of, and circumstances under which late payment penalties will be imposed. Section 6 Use of Composite Rates A. Small employer carriers may offer the small employer rates calculated by use of the following methods subject to the following restrictions:

1. 1. Four-tier family, age-banded rates calculated pursuant to Section 5 of this regulation; OR 2. A choice between four-tier, age-banded rates, calculated pursuant to Section 5 of this regulation, and composite rates. It shall be construed that the small employer carrier has offered the small employer a choice between the two methods if, at initial application and at each renewal:
   1. a. Both methods are offered to the small employer, with the differences clearly explained in writing; OR b. The small employer is given a written option to indicate that: 1) both rating methods need be presented; or 2) only age-banded rates need be presented; or 3) only the composite rate need be presented. This indication may be a check-off on the application or renewal form or other similar form that complies with this section.

B. Small employer carriers may offer small employers composite rates as an alternative to four-tier, age- banded rates calculated pursuant to Section 5 of this regulation if all of the following conditions are met:

1. 1. The small employer carrier makes the same offer across its entire book of Colorado small group business where an employer has ten (10) or more eligible employees. If the small employer carrier makes this offer to all small employers having ten (10) or more eligible employees, then the small employer carrier may also offer composite rates to small employers having fewer than ten (10) eligible employees. The small employer carrier must establish a pre-determined minimum size for offering composite rates. The same offer must be made available to all small employers having at least this pre-determined number of eligible employees.
   1. 2. The small employer carrier must clearly state on its application and renewal forms for all of its small group products the differences between age-banded and composite rates and that either:
      1. a. The minimum number of eligible employees for calculating composite rates is ten (10) and that all small employers with ten (10) or more eligible employees are entitled to a choice of composite rates or four-tier family, age-banded rates, and have the right to see them calculated either or both ways; OR b. If the number of minimum eligible employees is less than ten (10), the small employer carrier shall state the minimum number and that all small employers with at least this minimum number of eligible employees are entitled to a choice of composite rates or four-tier, age-banded rates, and have the right to see them calculated either or both ways.
   2. 3. Calculating Composite Rates:
      1. a. New Policies - At the time of the initial application by the small employer, composite rates must be calculated separately for each small employer, based upon the small employer’s actual enrollment as of the effective date.
      2. b. Renewing Groups - At renewal, composite rates must be calculated for each small employer group based on enrollment as of the date of the renewal calculation, or as of the effective date for the renewal rates, which shall be consistent for all small employers. A second quote, subsequent to the date of the renewal calculation, may be calculated IF the demographics of the small group have changed significantly since the date of the original renewal quote, and the carrier recalculates the composite rates in all similar circumstances. If the carrier retains the right to revise the original calculation, this right must be clearly disclosed. Despite changes in the demographic composition of the small employer group, composite rates shall be set, as of the renewal date, for a particular small employer for the entire rating period.
   3. 4. The small employer carrier uses the same composite rating methodology for all small employers. The small employer carrier may offer composite rates on a two tier (i.e. employee and employee plus dependents), three tier or four tier composition basis. If the small employer carrier elects to offer these three choices, it is at the employer’s sole discretion whether the composite rates are set on the two-tier, three-tier, or four-tier family composition basis. However, the basis for the calculation of initial premiums before composite rating for a particular employer must be based on four-tier family, age-banded rates calculated pursuant to Section 5 of this regulation.
   4. 5. At the time of the initial application by the small employer, the composite rating and four-tier family, age-banded rating for a particular small employer must result in identical total premium collections due from that employer for the first month of the rating period. At renewal, the composite rating method and four-tier family, age-banded rating methods for each small employer must result in identical total premium amounts as of the date of the renewal calculation. Assuming there is no change in the demographic composition of the small employer group, composite rating and four-tier family, age-banded rating for a particular employer must result in identical total premium collections due from that employer for a given rating period.

C. Nothing in this section shall be construed to require carriers to provide other than four-tiered, age- banded rates.

Section 7 Rate Filings and Actuarial Certification A. The provisions of § §10-16-105(6), 10-16-105(6.5) and 10-16-107, C.R.S., and Colorado Insurance Regulation 4-2-11 shall apply to the filing of rates for small employer health benefit plans. Expected rate increases for small employer health benefit plans shall be submitted for approval to the Division of Insurance at least 60 days prior to the proposed implementation of the rates.

B. Small employer health benefit plan rate filings shall not be combined with either individual or large group rates. Additionally, they shall be filed separately by type of coverage (indemnity, preferred provider organization, or health maintenance organization).

C. Pursuant to §10-16-105(6.5), C.R.S., all carriers who sell, or offer for sale, policies subject to the requirements of this regulation, must submit an annual actuarial rate certification to the Division of Insurance prior to March 1 of each calendar year. Note - this certification may be combined with the Company’s Annual Rate Report. (See Section 8 of Amended Colorado Insurance Regulation 4-2-11.) Certifications shall be sent to the Colorado Division of Insurance, Attention: Rates and Forms Section. The certification must be signed by a qualified actuary and must contain at least the following:

1. 1. The name of the carrier and the identification number assigned by the National Association of Insurance Commissioners;
   1. 2. A list of all plans of health benefits and policy forms to which the certification applies;
   2. 3. A statement that covers at least the points listed in the following illustration: "I am familiar with the small group rating laws and regulations of the state of Colorado. In my opinion, as of January 1 of the year of this certification, the premium rates and rating methodology to which this certification applies are neither excessive, inadequate nor unfairly discriminatory, and they meet the requirements of the insurance laws and regulations of Colorado;"
   3. 4. The name and title of the qualified actuary signing the certification, and the name of the firm with which he or she is associated; and 5. The original signature of the qualified actuary and the date of the signature. Signature stamps or signatures on behalf of the actuary are not acceptable. Section 8 Enforcement Noncompliance with this regulation may result, after notice and opportunity for hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines and/or suspension or revocation of license. Section 9 Severability If any provision of this regulation or the application thereof to any other person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected thereby. Section 10 Effective Date This regulation is amended effective January 1, 2011.

Section 11 History Emergency Regulation 94-E-4; Effective October 20, 1994. Emergency Regulation 95-E-2; Effective January 20, 1995. Hearing date: December 8, 1994; Effective March 1, 1995. Hearing date: April 2, 1998; Effective June 1, 1998, Amended Sections 2, 3, 4, 5, 6, 7 & 10. Hearing date: October 2, 2000; Effective January 1, 2001, Amended Sections 5 & 6. Hearing date: September 4, 2002; Effective January 1, 2003. Hearing date: February 4, 2003; Effective March 31, 2003, Amended Sections 1, 5, 10 & 11. Emergency Regulation 03-E-6, Effective September 1, 2003. Hearing date: October 1, 2003; Effective December 1, 2003, Amended Sections 4, 5, 6, 7, 10 11. Hearing date: February 2, 2004; Effective April 1, 2004, Amended Sections 5, 10, & 11. Hearing date: August 4, 2004; Effective September 30, 2004. Hearing date: October 10, 2007; Effective January 1, 2008, Amended Sections 5, 7, 10, & 11. Hearing date: August 5, 2008; Effective October 1, 2008, Amended Sections 5, 7, 10 & 11. Emergency Regulation 08-E-10, Effective January 1, 2009. Hearing date: December 9, 2008; Effective February 1, 2009, Amended Sections 5, 10 & 11. Amended Regulation 4-6-7, Effective January 1, 2011.

Regulation 4-6-8 CONCERNING SMALL EMPLOYER HEALTH PLANS Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Issuance of Coverage Section 6 Restrictive Riders Section 7 Rules Relating to Fair Marketing Section 8 Special Provisions for Business Groups of One Section 9 Disclosure Requirements Section 10 Notice of Intent to Participate as a Small Employer Carrier Section 11 Severability Section 12 Enforcement Section 13 Effective Date Section 14 History Section 1 Authority This regulation is promulgated under the authority of § § 10-1-109(1), 10-16-105.2(1)(a)(IV) and (3), 10- 16-105(5), 10-16-108.5(8), 10-16-109, and 10-16-708, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to establish rules for implementing Colorado’s small group laws. This regulation concerns the applicability and scope of the small group provisions; carriers’ obligations to provide coverage; employee eligibility requirements; the use of restrictive riders; rules relating to fair marketing; special provisions that apply to business groups of one; and carrier disclosure requirements. Section 3 Applicability A. This regulation shall apply to any health benefit plan, whether provided on a group, group association, or individual basis, which:

1. 1. Meets one or more of the conditions set forth in § 10-16-105.2(1)(a)(I) through (IV), C.R.S., except as provided in § § 10-16-105.2(1)(d) and 10-16-105.2(1.5), C.R.S., and subsection 3.J. of this regulation; and 2. Provides coverage to a business group of one or to one or more employees of a Colorado small employer, without regard to whether the policy or certificate was issued in this state, except as provided in § § 10-3-903(2)(h), and 10-16-105.2(1)(c) and (3), C.R.S.

B. A carrier that provides individual or group health insurance coverage to one or more of the employees of a small employer or to a person or entity that meets the definition of a business group of one shall be considered a small employer carrier subject to the provisions of this regulation if it meets any of the conditions found in § 10-16-105.2(1)(a)(I) through (IV), C.R.S., except as provided in § 10-16-105.2(1)(c), (d) and (3) and § 10-16-105.2(1.5), C.R.S.

C. The provisions of this regulation shall apply to a health benefit plan provided to a small employer or to the employees of a small employer without regard to whether the health benefit plan is offered under or provided through a group policy or trust arrangement of any size or is sponsored by an association, health care coverage cooperative or discretionary group, except as provided in § § 10-16-105.2(1)(b) and 10-16-214(5), C.R.S.

D. If a small employer is issued a health benefit plan subject to the small group health insurance laws of Colorado, the provisions of this regulation and statutes concerning small group health insurance shall continue to apply to the health benefit plan in the event that the small employer subsequently employs more than fifty (50) eligible employees. A carrier providing coverage to such an employer shall, within sixty (60) days of becoming aware that the employer no longer meets the definition of a small employer, but no later than the anniversary date of the employer's health benefit plan, notify the employer that the small employer health insurance provisions of Colorado law shall cease to apply to the employer if such employer fails to renew its current health benefit plan or elects to enroll in a different health benefit plan.

E. If a health benefit plan is issued to an employer with more than fifty (50) eligible employees that is not a small employer but subsequently the employer becomes a small employer (e.g., due to the loss or change of work status of one or more employees), the provisions of this regulation and statutes concerning small group health insurance shall not apply to the health benefit plan. The carrier providing a health benefit plan to such an employer shall not become a small employer carrier solely because the carrier continues to provide coverage under the health benefit plan to the employer. A carrier providing coverage to such an employer shall, within sixty (60) days of becoming aware that the employer has fifty (50) or fewer eligible employees, notify the employer of the options and protections that may be available to the employer under the small group health insurance laws of Colorado, including the employer's option to purchase a small employer health benefit plan from any small employer carrier.

F. Employees in more than one state.

1. 1. If a small employer has employees in more than one state, with no state containing a numerical majority of its employees, and if the primary business location of the small employer is in this state, then the provisions of this regulation and statutes concerning small group health insurance shall apply to the health benefit plan issued to such a small employer, except as provided under § 10-3-903(2)(h), C.R.S. The number of employees in each state shall be determined as of the date the health benefit plan was issued to the small employer for the period that the health benefit plan remains in effect.
   1. 2. If a health benefit plan is subject to the small group health insurance laws of Colorado, this regulation and relevant statutes shall apply to all individuals covered under the health benefit plan.

G. A carrier that is not operating as a small employer carrier in this state shall not become subject to Colorado's small group health insurance laws solely because a small employer that was issued a health benefit plan in another state by that carrier moves to this state.

H. A plan marketed to individual employees through an employer or at a place of business is subject to this regulation and all applicable small group laws unless a carrier can demonstrate that the circumstances of the sale, marketing, and continuation of such plan coverage meet the conditions established in § 10-16-105.2(1)(a), (c) or (d), C.R.S., and as further defined in subsection 3.J. of this regulation.

I. A health benefit plan that meets the criteria listed in section 3.A. of this regulation shall be subject to small group requirements even if it covers only one person. Examples include but are not limited to:

1. 1. A health benefit plan that covers the only employee of a small employer;
   1. 2. A health benefit plan that covers just one employee because the other employees of a small employer have coverage under another health benefit plan and have waived off the plan; or 3. A health benefit plan that covers the only employer-determined eligible employee of a small employer.

J. Pursuant to the authority granted to the Colorado Division of Insurance (Division) under § 10-16- 105.2(1)(a)(IV), C.R.S., this regulation shall not apply to health benefit plans marketed by producers through an employer or at an employer’s place of business to individual employees if all of the following conditions are met both at the time of marketing and sale, and continuously during the period of coverage:

1. 1. No portion of the premium or benefit is paid by or on behalf of a small employer, except as permitted in § 10-16-105.2(1.5), C.R.S.;
   1. 2. No person covered by the health benefit plan is reimbursed, whether through wage adjustments or otherwise, by or on behalf of a small employer for any portion of premium, except as permitted in § 10-16-105.2(1.5), C.R.S.;
   2. 3. The health benefit plan is not treated by the employer or anyone covered by the plan who meets the definition of an eligible employee or dependent of an eligible employee as part of a plan or program for the purposes of Section 106, 125, or 162 of the federal Internal Revenue Code of 1986, as amended, except as permitted in § 10-16-105.2(1)(d), C.R.S.;
   3. 4. If the health benefit plan is marketed to an employer’s ineligible employees through an employer or at a place of business this marketing occurs only with the written permission or at the written request of the employer;
   4. 5. There is an employer-sponsored health benefit plan already in place at the place of business where the health benefit plan is being marketed, except that this requirement shall not apply to a self-employed person;
   5. 6. Except in the case of a self-employed person working out of the home, no billings, premium collections or other correspondence regarding the health benefit plan are sent to the place of business or otherwise involve the employer; and 7. The employee being marketed and/or sold the health benefit plan meets one or more of the following criteria:
      1. a. The employee will be terminating employment within thirty-one (31) days;
      2. b. The individual is a self-employed person with no employees;
      3. c. The employee is a seasonal employee with an employment contract that is shorter than the waiting period for coverage or is not eligible for coverage under his/her employer’s health benefit plan;
      4. d. The employee is a temporary or substitute employee;
      5. e. The employee works less than twenty-four (24) hours a week on a regular basis;
      6. f. The employee has a dependent who was covered under the employee’s employer- sponsored health benefit plan but that dependent is no longer eligible for such coverage, in which case an individual health benefit plan for such dependent may be marketed to the employee at the workplace;
      7. g. The employee is a late enrollee who is completely excluded from his/her employer’s health benefit plan for a year; or h. The employee is in a waiting period for coverage under an employer-sponsored health benefit plan and all the following conditions are met:
         1. (1) The individual health benefit plan marketed to such an employee is a short- term health benefit plan that can be rewritten by the short-term carrier or any other carrier for a combined total of no more than twelve (12) months;
         2. (2) The producer selling such a plan gives the employee an explanation of the employee’s continuation rights under his/her prior employer’s plan; and (3) The employee is alerted by the same producer that, depending on the terms and conditions of the short-term policy, the employee may lose his/her right to credit for pre-existing condition periods met under a prior policy when he/she does become eligible for employer-sponsored coverage.

K. Nothing in subsection J. above shall prohibit a small group carrier that provides coverage to a small employer group from offering individual health benefit plans to dependents of the eligible employees; however, the small employer carrier must also offer the group coverage to all of the dependents. Such group coverage could specify different levels of coverage for eligible employees and dependents.

Section 4 Definitions A. "Actively marketed" means with respect to a small employer health benefit plan offered by a carrier that the carrier uses at least the same sources and methods of distribution that it routinely uses in Colorado to market its most frequently sold small employer health benefit plan.

B. "Clear and conspicuous" means with respect to a disclosure that the disclosure is reasonably understandable and designed to call attention to the nature and significance of the information it contains. A disclosure is considered designed to call attention to the nature and significance of the information in it if the carrier:

1. 1. Uses a typeface and type size that are easy to read;
   1. 2. Provides wide margins and ample line spacing;
   2. 3. Uses boldface, italics, underscoring, or capitals for key words and phrases; and 4. In a form that combines the disclosure with other information, uses a plain-language heading to call attention to the disclosure portion of the document, and uses a type size that is greater than the type size predominantly used in the rest of the document.

C. "Limited benefit health insurance" means a health policy, contract or certificate offered or marketed as supplemental health insurance that pays specified amounts according to a schedule of benefits to defray the costs of care, services, deductibles, copayments or coinsurance amounts not covered by a health benefit plan. "Limited benefit health insurance" does not include short-term limited duration health insurance policies, contracts or certificates; or catastrophic health policies, contracts or certificates. Such non-supplemental plans are included under the term "health benefit plan" as defined in § 10-16-102(21), C.R.S.

D. "Renewed", for the purposes of this regulation, means that a health benefit plan is continued upon the occurrence of the earliest of:

1. 1. The anniversary date of the employer’s plan;
   1. 2. The date on which premium rates are changed or, by the terms of the plan, can be changed; or 3. The date on which benefits are changed or, by the terms of the plan, can be changed. Section 5 Issuance of Coverage

A. Providing Coverage.

1. 1. A small employer carrier shall actively offer to all small employers in the carrier’s service area a choice of all small group plans the carrier markets in Colorado, as set forth in § 10-16- 105(7.3)(a), C.R.S. A small employer carrier shall issue coverage under any of its small group plans for which a small employer makes application, except:
   1. a. Pursuant to § 10-16-105.2(3), C.R.S., a small employer carrier is not required to offer coverage to a self-employed business group of one or sole proprietor who elects coverage under an individual policy issued pursuant to § 10-16-105.2(1)(c), C.R.S., and who is covered under that policy for less than three (3) years. To determine whether an individual has been covered under an individual policy issued pursuant to § 10-16-105.2(3), C.R.S., for less than three (3) years, small employer carriers shall refer to Colorado Insurance Regulation 4-2-19.
      1. b. A small employer carrier is not required to issue coverage to a business group of one that does not meet the carrier’s normal and actuarially-based underwriting criteria except during the open enrollment period, which is defined as the thirty-one (31) days following the birth date of the person qualifying as a business group of one, or within thirty-one (31) days of a business group of one’s qualifying event as defined in § 10-16-105(7.3)(i), C.R.S. If the business group of one does not meet the carrier’s underwriting criteria, the only coverage that must be issued during these periods is the applicant’s choice of the Colorado Basic or Standard Health Benefit Plans.
      2. c. A small employer carrier shall be considered to have met the requirement to offer its small group product at the time a policy has been issued. In the event that a small employer’s coverage is terminated due to non-payment of premiums, the carrier that issued the policy can deny a new application for the same small employer on the basis of this termination, except that:
         1. (1) If the small employer is a group of 2-50, the application can be denied for six months after termination for non-payment or at the end of the original policy period, whichever is greater; or (2) If the small employer is a business group of one, the application can be denied for six months after termination or until the next open enrollment period, whichever is greater.

            This provision shall not relieve the employer of its responsibility for payment of any outstanding premiums or late charges owed for the prior period of coverage.

      3. d. A small employer carrier shall be considered to have met the requirement to offer its small group product at the time a policy has been issued; therefore, a carrier does not have to honor requests to change policy provisions during the policy term.
   2. 2. A small employer carrier shall offer to provide coverage to each eligible employee and to each dependent of an eligible employee. For managed care plans, an employee must either work or reside in the carrier’s service area to be considered an eligible employee, except as provided in § 10-16-704(2)(g), C.R.S.
   3. 3. A small employer carrier may offer the employees of a small employer the option of choosing among one or more health benefit plans, provided that each employee may choose any of the offered plans, except as provided in paragraph 5.A.5. of this regulation. The choice among benefit plans may not be limited, restricted or conditioned based upon health status-related factors of the employees or their dependents. Nothing in this section limits the ability of a small employer carrier to set participation rules based upon group size that may limit the availability of multi-option plans to a single employer as long as any of the component plans offered could be accessed individually by any small employer.
   4. 4. Small employer carriers may make the sale of any small group policy, except the Colorado Basic and Standard Health Benefit Plans, conditional upon the sale of group life insurance if:
      1. a. The carrier prominently discloses in all of its sales and promotional materials, official offerings, and proposals that the offering of such coverage to all small employers is conditional upon the purchase of a specified level of group life insurance coverage;
      2. b. The carrier agrees to guarantee issue group life insurance;
      3. c. The carrier includes with any small group plan proposal of coverage to a small employer the additional premium that will be required to pay for life insurance; and d. The carrier makes the same offer to all small employers.
   5. 5. A small employer carrier that only offers managed care plans may offer an indemnity plan to a small employer’s out-of-area employees only (instead of to all employees). However, the following conditions may apply:
      1. a. A health maintenance organization (HMO) may offer coverage through an arrangement with an insurance carrier as long as the coverage is only made available to the out-of-area employees of a small employer. The use of insurance coverage for this purpose only will not result in a requirement that the HMO or other carrier actively market the Colorado Basic and Standard Indemnity Health Benefit Plans and will not result in the other carrier being considered a small employer carrier.
      2. b. An HMO may offer coverage to the out-of-area employees of a small employer or a small employer located outside of the HMO’s approved service area pursuant to the notice, disclosure, and reimbursement provisions as described in § 10-16- 704(2) and (2.5), C.R.S. If an HMO offers coverage to one or more out-of-area employees of a small employer or small employers, it must offer it to all small employers.
      3. c. A carrier offering a managed care plan may offer indemnity coverage as long as the coverage is only made available to the out-of-area employees of the small employer. For these plans, out-of-area employees are those working and residing outside of the state of Colorado. The use of insurance coverage for this purpose only will not result in the carrier being required to actively market the Colorado Basic and Standard Indemnity Health Benefit Plans.
      4. d. If a carrier offers indemnity out-of-area coverage to one or more small employers, it must offer it to all small employers.

B. Determining Who is an Eligible Employee and/or Dependent.

1. 1. The Division finds that, when defining "eligible employee" in § 10-16-102(15), C.R.S., the sole intent of the General Assembly was to create a maximum weekly work requirement which small employer carriers may impose as a requirement for an employee's participation in a health benefit plan. Nothing in the definition of "eligible employee" was intended to limit an employer's traditional ability to set valid and acceptable standards for employee eligibility based upon the terms and conditions of employment, including a minimum weekly work requirement in excess of twenty-four (24) hours and eligibility based upon salaried versus hourly workers and management versus non-management employees.
   1. 2. The Division finds that, subject to other statutory restrictions and the provisions of this regulation, a small employer carrier may offer a health benefit plan to the eligible employees of a small employer as that employer defines its eligible employees (herein after referred to as "employer-determined eligible employees"). However, a carrier must offer coverage to all small employers for all employees with a regular work week of at least twenty-four (24) hours on a regular basis. The decision of a small employer to limit eligibility for coverage as provided for in paragraph 1. of this subsection B. shall be solely at the small employer's discretion, without direct or indirect pressure or suggestion by the carrier, producer, or their representatives. The small employer carrier may offer coverage only to such employer-determined eligible employees and their dependents and may apply its minimum participation and contribution criteria solely to such employer- determined eligible employees.
   2. 3. Listing of eligible employees and dependents.
      1. a. A small employer carrier shall require each small employer that applies for coverage, as part of the application process, to provide a complete list of eligible employees and dependents of eligible employees, and a list of employer-determined eligible employees and dependents, if this is a different list.
      2. b. The small employer carrier may require the small employer to provide appropriate supporting documentation, such as the Unemployment Insurance Quarterly Wage and Tax Report (UITR) often referred to as a W-2 Summary Wage and Tax Form, to verify the information required under this paragraph.
      3. c. In the event that a UITR form is not available because the employer was not in business during the preceding quarter or the employer has outsourced payroll functions or this form is not required due to federal tax exemptions related to the type of small business or not available due to the business form (i.e. partnership), the carrier shall accept reasonable alternate documentation for this information. Alternate documentation includes, but is not limited to, payroll documentation from the employer or the employer’s payroll administrator or employee leasing company; organizational documents; or other reasonable proof.
   3. 4. Waivers.
      1. a. A small employer carrier shall secure a waiver with respect to each eligible employee and each dependent of such an eligible employee (or each employer-determined eligible employee and their dependents if this is different than the list of eligible employees) who declines an offer of coverage under a health benefit plan provided to a small employer.
      2. b. The waiver shall be signed by the eligible employee (on behalf of such employee or the dependent of such employee) and shall certify that the individual who declined coverage was informed of the availability of coverage under the health benefit plan.
      3. c. The waiver form shall require that the reason for declining coverage (e.g., covered under spouse's plan, cannot afford coverage, etc.) be stated on the form and shall include a written warning of the penalties imposed on late enrollees.
      4. d. Waiver forms shall be maintained by the small employer carrier. Section 6 Restrictive Riders

A. Small employer carriers shall not place restrictive riders, endorsements or other policy provisions on a small group plan that would restrict coverage of particular individuals, except with respect to late enrollees as provided for in § 10-16-118(1)(c), C.R.S. If a small employer carrier offers coverage to a small employer, such carrier shall offer the coverage under terms and conditions (including provisions related to pre-existing conditions) that are consistent with Colorado law to all eligible employees of the small employer and their dependents.

B. Except as permitted in § 10-16-118(1)(c), C.R.S., concerning late enrollees, a small employer carrier shall not modify or restrict any health benefit plan with respect to any eligible employee or dependent of an eligible employee, through riders, endorsements or otherwise, for the purpose of restricting or excluding the coverage or benefits provided to such employee or dependent for specific diseases, medical conditions or services otherwise covered by the plan. Section 7 Rules Related to Fair Marketing A. A small employer carrier shall actively market each of its health benefit plans to Colorado small employers in all areas where the carrier is authorized to conduct business.

B. Every health benefit plan offered by a small employer carrier to new groups with less than fifty-one

1. (51) eligible employees shall be actively marketed to all groups that meet the definition of a small employer pursuant to § 10-16-102(40), C.R.S. Managed care plans are required to maintain an adequate network pursuant to § 10-16-704(1), C.R.S., and must have a participating provider for all covered benefits.
   1. 1. HMOs are authorized to conduct business in the specific counties and/or zip codes approved by the Division.
   2. 2. A carrier offering a managed care plan that is not an HMO or HMO Point-of-Service (POS) plan must actively market its small group plans across the service area, which is defined as the entire state of Colorado.
   3. 3. Carriers that are not able to maintain a sufficient network after good-faith efforts to contract may employ certain remedies as described in § 10-16-704(2) and (2.5), C.R.S.

C. Small employer carriers cannot deny an application for coverage from a group based on its size, if the group satisfies the definition of a small employer, except as permitted by law for business groups of one, unless, pursuant to section 3 of this regulation, such small employer group is not subject to the provisions of this regulation.

D. Small employer carriers may establish participation rules that vary based upon group size as allowed in § 10-16-105(7.4), C.R.S.; however, the required participation level shall not exceed 75% of eligible employees who are not covered by existing creditable group coverage or individual coverage that was legally obtained prior to the individual’s eligibility for group coverage under the employer’s existing group plan and consistently maintained by the individual. For the purpose of determining participation, "group coverage" shall mean:

1. 1. Medicare or Medicaid;
   1. 2. An employee welfare benefit plan or group health insurance or health benefit plan;
   2. 3. A state health benefits risk pool (including, but not limited to, CoverColorado); or 4. Chapter 55 of title 10 of the United States Code, a medical care program of the federal Indian health service or of a tribal organization, a health plan offered under chapter 89 of title 5, United States Code, a public health plan, or a health benefit plan under section 5 (e) of the federal "Peace Corps Act" (22 U.S.C. Sec. 2504 (e)).

E. A small employer carrier shall not apply more stringent or detailed requirements related to the price quote or application process for the Colorado Basic and Standard Health Benefit Plans than it applies to other small group health benefit plans offered by the small employer carrier, except as allowed for cut-off dates and medically underwriting business groups of one.

F. A small employer carrier may establish underwriting rules that allow cut-off dates for business groups of one that are different from the cut-off dates for other small employers to the extent that additional time is needed to determine eligibility and perform medical underwriting. Such dates shall be consistent with the cut-off dates for similar medically underwritten business (e.g. individual products), if applicable. Under no circumstance shall the cut-off date be earlier than the first of the month prior to the requested effective date of coverage.

G. Price Quotes.

1. 1. A small employer carrier shall provide a price quote to a small employer (directly or through an authorized producer) within five (5) business days of receiving all information necessary to provide a requested quote. Each price quote must be calculated using the carrier’s filed rate, as defined in Colorado Insurance Regulation 4-6-7.
   1. 2. A small employer carrier shall notify a small employer (directly or through an authorized producer) within five (5) business days of receiving a request for a price quote if any additional information is needed. If a small employer carrier provides a price quote prior to receiving all information necessary to calculate any premium adjustments allowed under § 10-16-105(8.5)(a), C.R.S., that quote must be of the filed rate. The quote shall include a statement indicating that the rate is not final, and once all information is received, the rate will be recalculated using rating factors allowable by law, and may vary from the initial price quote.
   2. 3. A price quote shall be provided without requiring verification of the eligibility of the small group, including business groups of one. The fact that a price quote has been issued shall not prevent the small employer carrier from verifying the group’s eligibility before issuing the coverage.

H. A small employer carrier shall not establish small group producer commission or bonus programs in a manner that discourages marketing to very small groups. A commission or bonus program that establishes a lower payment rate such as a lower flat fee per employee or member or percentage of premiums for smaller employers based upon a group’s size shall be considered risk avoidance and an unfair trade practice.

I. No producer or carrier shall advise, induce or encourage a small employer to arrange for coverage for an employee or dependent through CoverColorado or another mechanism for the purposes of separating such person from the group policy, except as allowed under subsection 3.K. of this regulation.

Section 8 Special Provisions Applicable to Business Groups of One A small employer carrier may request documentation as necessary to determine whether a small employer meets the definition of a business group of one for purposes of obtaining and maintaining small group health coverage.

A. In order to determine whether a business group of one qualifies for small group health coverage, the business group of one must provide sufficient documentation that it has carried on significant business activity in the past year, and has gross income from active participation in the business for at least one year out of the most recent consecutive three-year period that is sufficient to pay for annual health insurance premiums for the business group of one.

B. In order to determine whether a business group of one has sufficient income to qualify for a carrier’s small group plans, the business group of one must provide tax documentation of the business’s gross income as appropriate for the nature of the small business. The amount shall be determined using the gross income for the business as indicated on the appropriate forms recognized by the federal Internal Revenue Service for business income reporting. For corporations, the gross income is equal to total income reported to the federal Internal Revenue Service. If the small business has a specific federal tax exemption, alternate forms documenting the income generated by business activities shall be accepted.

C. If the business group of one meets all eligibility requirements but the gross income is insufficient for the specific plan requested, the carrier shall determine if the income is sufficient for another small group plan offered by the carrier. The carrier shall notify the employer and provide an opportunity to enroll in another plan for the same effective date.

D. A business group of one must provide sufficient information to show that the individual works full time (24 hours or more per week on a regular basis). In most situations, the nature of the business and the business income information should be sufficient to verify that the business group on one is working full time. In the event that the nature of the business or the tax information would indicate that the individual may not be actively engaged in business on a full-time basis, the carrier may request additional information to reasonably determine whether the individual is employed on a full-time basis. Additional information that may be requested includes:

1. 1. Invoices, billing records, general ledgers or similar information for a portion of the past year not to exceed three (3) months;
   1. 2. Additional tax documentation substantiating that business activities are not passive;
   2. 3. Organizational documents including business license, articles of incorporation, and by-laws as appropriate for the type of business; and 4. In the absence of the information listed above, the carrier may request business collateral materials including marketing materials, business forms, website addresses, or similar information in an effort to verify eligibility.

Section 9 Disclosure Requirements A. Pursuant to § § 10-16-105(5) and 10-16-704(9), C.R.S., small employer carriers shall provide a disclosure in all small employer marketing and solicitation materials, in a clear and conspicuous manner, that:

1. 1. Specifies that the employer will not be considered part of a separate class of business;
   1. 2. Specifies all factors, including case characteristics, utilized in setting premium rates for a specific employer;
   2. 3. Explains the employer's right to renew;
   3. 4. Explains pre-existing condition exclusions;
   4. 5. Discloses that rates for any and all small group products being marketed by the carrier in the Colorado small group market will be given to a small employer, upon either oral or written request of such employer, within five (5) business days of the request; and 6. In the case of a managed care plan, explains the existence, availability and general nature of an access plan (e.g., that an access plan exists for every managed care plan and that it lists hospitals, providers, referral procedures, grievance procedures and emergency coverage provisions).

B. Pursuant to § 10-16-105(5), C.R.S., small employer carriers shall also include in all printed marketing and solicitation materials the following:

1. 1. Information as to the benefits and premiums available under all health benefit plans for which the employer is qualified. This requirement shall be satisfied if the carrier provides the following information:
   1. a. The policy number (if any), policy name and policy type (e.g., HMO, indemnity, preferred provider, point-of-service plan) for all the plans for which the employer qualifies; and b. A summary of the benefits available under all the plans for which the employer qualifies that highlights the most salient differences among the plans as required in Colorado Insurance Regulation 4-2-20.
   2. 2. When marketing any small group plan other than the Colorado Basic Limited Mandate Health Benefit Plans, carriers are required to make the following disclosure in a clear and conspicuous manner:
      1. "Small employers purchasing any health benefit plan other than the Colorado Basic Limited Mandate Health Benefit Plan must pay for all of the mandated benefits pursuant to section 10-16-104, C.R.S. The premium for this plan includes the cost of these mandated benefits, specifically: coverages for newborn; maternity, pregnancy, childbirth, and complications from pregnancy and childbirth; therapies for congenital defects and birth abnormalities; mental illness; biologically-based mental illness; the availability of alcoholism treatment; the availability of hospice care; prostate cancer screening; child health supervision; hospitalization and general anesthesia for dental procedures for dependent children; diabetes; prosthetic devices; early intervention services for certain children; assessment, diagnosis and treatment of autism spectrum disorders for children under nineteen; colorectal screening; cervical cancer vaccinations; certain preventive health services; hearing aids for minors; and certain routine care during participation in a clinical trial."
   3. 3. When marketing a Colorado Basic Limited Mandate Health Benefit Plan that does not include certain mandated benefits cited by statute, carriers are required to make the following disclosure in a clear and conspicuous manner:
      1. "Interested policyholders, certificate holders, and enrollees are hereby given notice that this small group policy does not cover all the health services and benefits, including prostate screenings, mental health, and dental anesthesia for children, which the Colorado Revised Statutes usually require group plans to cover."

C. Small employer carriers are not required to include the disclosure information set forth in subsections 9.A. and 9.B.1. of this regulation on the Colorado Health Benefit Plan Description Forms described in Colorado Insurance Regulation 4-2-20.

Section 10 Notice of Intent to Participate as a Small Employer Carrier A carrier shall not offer health benefit plans to small employers in this state, unless the carrier has filed with the Commissioner a notice of intent to operate as a small employer carrier. Section 11 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected and shall remain in full force and effect.

Section 12 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, refund of excess premiums plus interest, restitution, issuance of cease and desist orders, and/or suspensions or revocation of license or certificate of authority. Among others, the penalties provided for in § 10-3-1108, C.R.S. may be applied. Section 13 Effective Date This amended regulation will be effective as of January 1, 2012. Section 14 History Originally issued as Emergency Regulation 94-E-5, effective October 20, 1994. Reissued as Emergency Regulation 95-E-3, effective January 20, 1995. Issued as Regulation 4-6-8, effective March 1, 1995.

Amended sections 1, 2, 4, 9, and 15 of Regulation 4-6-8, effective December 31, 1995. Amended sections 1 through 12 and 15 of Regulation 4-6-8, effective November 1, 1997. Amended Regulation 4-6-8, effective March 2, 2003.

Amended Regulation 4-6-8 effective October 1, 2004.

Amended Regulation 4-6-8 effective October 1, 2009.

Amended Regulation effective June 1, 2011.

Amended Regulation effective January 1, 2012.

Regulation 4-6-9 CONCERNING CONVERSION COVERAGE Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Choice of Basic or Standard Health Benefit Plans Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated under the authority of § § 10-1-109(1) and 10-16-109, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to establish rules for implementing the statutory requirement that group carriers offer a choice of a basic and standard health benefit plan to persons entitled to conversion coverage.

Section 3 Applicability This regulation shall apply to small group and large group health benefit plans subject to the group laws of Colorado and to all policies, plans and certificates subject to the provisions of § § 10-16-108(1)(c), 10-16- 108(2)(d), and 10-16-108(4), C.R.S.

Section 4 Definitions A. “Carrier” shall have the same meaning as set forth in §10-16-102(8), C.R.S.

B. "Conversion coverage" means that coverage provided by carriers pursuant to § § 10-16-108(1)(c), 10- 16-108(2)(d), and 10-16-108(4), C.R.S.

C. "Renewed." A plan of health benefits is deemed renewed upon the occurrence of the earliest of: the anniversary date of issue; the date on which premium rates are or by the terms of the plan can be changed; or the date on which benefits are or by the terms of the plan can be changed. Section 5 Choice of Basic or Standard Health Benefit Plans A. All persons entitled to elect conversion coverage pursuant to § § 10-16-108(1)(c) or 10-16-108(2)(d), and 10-16-108(4), C.R.S., shall be offered a choice of the basic or standard health benefit plans. The basic and standard health benefit plans and rules for their implementation are described in Colorado Insurance Regulation 4-6-5.

B. All persons entitled to elect conversion coverage pursuant to § 10-16-108(4), C.R.S., shall be offered a choice of the basic or standard health benefit plans except that, pursuant to § 10-16-108(4)(b), C.R.S., a small employer carrier may offer as conversion coverage the basic health benefit plan only (instead of a choice of the basic or the standard health benefit plan) if all the following conditions are met:

1. 1. The applicant for conversion coverage is eligible for conversion coverage pursuant to § 10-16- 108(4)(b), C.R.S., but is not eligible for conversion coverage under § § 10-16-108(1)(c) or 10-16-108(2)(a), C.R.S., and 2. The small employer health benefit plan from which the applicant is converting had benefits which provided coverage for hospital and physician services which, in most respects, were significantly less generous than the standard health benefit plan and comparable to or less generous than the basic health benefit plan.

C. A carrier shall, at minimum, offer to an applicant for conversion coverage at least one basic conversion coverage health benefit plan and at least one standard conversion health benefit plan of the same type (i.e., traditional indemnity, preferred provider or health maintenance organization) as the coverage from which the applicant is converting. Carriers may also offer the other types of standard or basic health benefit plan conversion coverage to applicants. If a carrier offers several preferred provider or health maintenance organization plans, it may meet this requirement by offering the most managed care version of its preferred provider plans and the most managed care version of its health maintenance organization plans. For the purposes of this subsection C., "most managed care version" is that plan which, when compared to the carrier’s other managed care plans, offers the consumer the greatest financial incentive for the utilization of network participating providers.

D. Carriers may offer other conversion coverage policies in addition to the basic and standard health benefit plans.

E. Conversion coverage under the basic and standard health benefit plans shall not be modified in any way, except that carriers may offer optional riders to the basic or standard health benefit plans which would add additional coverage, so long as such coverage is offered to all applicants for conversion coverage and guarantee issued to any such person requesting additional coverage. Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected. Section 7 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspension or revocation of licenses or certificates of authority. Among others, the penalties provided for in § 10-3-1108, C.R.S., may be applied.

Section 8 Effective Date Amended regulation effective on February 1, 2011.

Section 9 History New regulation effective March 1, 1995.

Amended regulation effective February 1, 2011.

Regulation 4-6-10 EMPLOYEE LEASING COMPANIES AND HEALTH CARE COVERAGE Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated pursuant to § § 10-1-109, 10-3-1110 and 10-16-109, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to establish and implement rules for health carriers that issue and renew health plans to employee leasing companies and work-site employers. Section 3 Applicability This regulation shall apply to all health carriers.

Section 4 Definitions A. "Carrier" shall have the same meaning as set forth in § 10-16-102(8), C.R.S.

B. "Employee leasing company" shall have the same meaning as set forth in § 8-70-114(2)(a)(V), C.R.S.

C. "Employee leasing company contract" shall have the same meaning as set forth in § 8-70-114(2)(a) (VI), C.R.S.

D. "Work-site employer" shall have the same meaning as set forth in § 8-70-114(2)(a)(VII), C.R.S. Section 5 Rules A. Carriers shall ensure that health plans issued or renewed to employee leasing companies that have aggregated their work-site employers for purposes of sponsoring health coverage as permitted by § 8-70-114(2)(a)(VIII), C.R.S., conform with all laws applicable to large group health coverage products, where the total aggregated employees exceeds fifty.

B. Carriers shall issue or renew group health coverage directly to work-site employers, where the work- site employer meets the definition of a small group as required by law, where the employee leasing company does not sponsor a health plan for its work-site employers.

1. 1. If the employee leasing company does not provide access to a group plan to work-site employers, then providing only administrative functions related to health coverage does not constitute "sponsoring" a health coverage plan. An employee leasing company shall not be considered to be sponsoring a health coverage plan where the employee leasing company performs only administrative functions related to health coverage purchased directly by work-site employers. Examples of administrative functions include, but are not limited to deducting premiums from work-site employer payrolls for delivery to the carrier; and administering premium collection for COBRA continuation coverage.
   1. 2. Employee leasing companies shall not be considered to be sponsoring a health coverage plan under subsection B where the employee leasing company provides health coverage solely for its own staff who are separate and distinct from the work-site employer employees.

C. Carriers may issue or renew health plans directly to work-site employers where the employee leasing company has aggregated work-site employees for purposes of sponsoring health coverage, but the work-site employer has declined the coverage, provided the employee leasing company offers to sponsor health coverage for the work-site employer at the time of initial contracting with the work-site employer and at least at each open enrollment period, and the carrier obtains access to the certification specified below.

1. 1. An employee leasing company is sponsoring a health coverage plan where the employee leasing company is directly involved in the negotiation or procurement of the health plan for the work-site employers. An example of involvement in the negotiation or procurement of the health plan includes, but is not limited to instances where the employee leasing company requires the work-site employer to use a particular producer or carrier in order to obtain particular services or benefits through the employee leasing company.
   1. 2. The carrier providing the employee leasing company sponsored coverage shall retain access to the certification required pursuant to paragraphs (e) and (f) of § 8-70-114(2), C.R.S. The carrier shall make this certification available within a reasonable time upon request by the Commissioner.

D. Carriers may offer health coverage to the employee leasing company’s administrative staff separately from the coverage offered to the employees of the work-site employer, even where the employee leasing company aggregates work-site employer employees under § 8-70-114(2)(b)(VIII), C.R.S. The carrier may consider only the number of employee leasing company administrative employees for purposes of determining the applicability of small group or large group laws applicable to the particular plan offered to the employee leasing company’s administrative employees.

E. Carriers providing employee leasing company sponsored health plans may require the employee leasing company to apply the carrier’s contribution and participation requirements to discrete potential work-site employer groups prior to contracting, where:

1. 1. The participation and contribution requirements are in writing and are developed by the carrier and not by the employee leasing company;
   1. 2. The participation and contribution requirements are the same for all potential work-site employers of that employee leasing company; and 3. The participation and contribution requirements are applied uniformly and in a non- discriminatory fashion to all potential work-site employers by the employee leasing company.

Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected. Section 7 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspension or revocation of licenses or certificates of authority. Among others, the penalties provided for in § 10-3-1108, C.R.S., may be applied.

Section 8 Effective Date This amended regulation is effective July 15, 2011.

Section 9 History New regulation, effective June 1, 2001.

Amended regulation, repealing section 5.E. and reformatting, effective March 31, 2003. Amended regulation effective July 15, 2011.

Regulation 4-6-11 CONCERNING COVERCOLORADO STANDARDIZED NOTICE FORM TO BE USED TO NOTIFY CERTAIN INDIVIDUALS, ELIGIBLE FOR MEDICARE, OF ELIGIBLITY FOR COVERCOLORADO Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-8-520, C.R.S.

Section 2 Scope and Purpose The purpose of this regulation is to specify the standardized notice requirements to be used to notify certain individuals, eligible for Medicare, of their eligibility for a CoverColorado coordination plan. Section 3 Applicability This regulation applies to all carriers offering Medicare Supplemental plans. Section 4 Definitions “Eligible Person” means an individual who is:

A. Under age sixty-five;

B. Eligible for Medicare by reason of disability;

C. Enrolled in Parts A and B of Medicare; and D. Not applying during the open enrollment period for a Medicare Supplement Policy. Section 5 Rules A. Notification Requirements for Individuals with Adverse Underwriting Decisions

1. 1. In order to comply with § 10-8-521, C.R.S., all Medicare supplement carriers, shall provide a notice to an eligible person who have been rejected for a Medicare supplement plan that he or she may be eligible for coverage under CoverColorado.
   1. 2. Medicare supplement carriers shall be required to provide the CoverColorado Coordination Plan Notice Form to an eligible person who has been rejected for coverage. Carriers may print the CoverColorado Coordination Plan Notice Form on their own stationery but shall use the order and content prescribed in Section 5B below.
   2. 3. The carrier shall attach a copy of the CoverColorado Plan Notice form to the rejection letter sent to an applicant for a Medicare supplement plan.

B. Elements of the CoverColorado Notice Coordination Plan Notice Form: The elements of notification as determined by the Commissioner, which must be given to individuals with adverse underwriting decisions, must include:

1. 1. Applicant/Insured's Name;
   1. 2. Policy # (if applicable);
   2. 3. Reason for notice: rejection of coverage;
   3. 4. Name, address, contact person and telephone number of CoverColorado Administrative Office to whom interested persons should be referred;
   4. 5. CoverColorado website URL;
   5. 6. Name and phone number of underwriter or other contact at the insurer's office; and 7. The statement: You may receive information about the available CoverColorado benefits and exclusions by telephoning the CoverColorado administrative office at the above listed number.

Section 6 Severability If any provision of this regulation or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the regulation and the application of such provision shall not be affected thereby.

Section 7 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws, which include the imposition of fines and/or suspension or revocation of license. Section 8 Effective Date This regulation is ammended effective on February 1, 2010. Section 9 History New Regulation 4-6-11 effective August 1, 2007.

Amended Regulation effective February 1, 2010.

Regulation 4-6-12 MANDATORY COVERAGE OF MENTAL ILLNESSES PURSUANT TO §10-16-104

1. (5) AND (5.5), C.R.S., FOR SMALL GROUP POLICIES Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § §10-1-109 and 10-16-104 (5) and (5.5), C.R.S.

Section 2 Scope and Purpose The purpose of this regulation is to clarify the implementation of SB07-36 and the coordination of subsections (5) and (5.5) of §10-16-104, C.R.S. It is being amended to incorporate changes required due to HB09-1338, which was enacted by the General Assembly effective July 1, 2009. Section 3 Applicability This regulation applies to every entity issuing small group health benefit plans pursuant to §10-16-105, C.R.S. This amended regulation replaces Emergency Regulation 09-E-02 in its entirety. Section 4 Definitions Biologically based mental illness (BBMI) shall have the same meaning as in §10-16-104(5.5), C.R.S. Section 5 Rules A. Section 10-16-104(5), C.R.S. applies to small group policies as defined in §10-16-102(42), C.R.S. and which are subject to §10-16-105, C.R.S.

B. Section 10-16-104(5), C.R.S., applies to all mental illness conditions including but not limited to the BBMI benefits required by §10-16-104(5.5), C.R.S. under small employer group health benefit plans and includes the following mandated benefits:

1. 1. At least 45 inpatient (90 partial hospitalization) days in any one twelve-month period;
   1. 2. No less than 20 outpatient visits or no less than $1,000 paid for outpatient visits in any twelve- month period; and 3. Copayment or coinsurance shall not exceed a 50% requirement.

C. Section 10-16-104(5.5), C.R.S., applies to a defined subset of mental illness conditions for BBMI for small employer group health benefit plans. Section 10-16-104(5.5), C.R.S., provides coverage for treatment for BBMI that is no less extensive than coverage provided for any other physical illness.

D. Based on subsections B. and C. of this section 5, the following findings are made:

1. 1. The increased insurance coverage of §10-16-104(5.5) C.R.S., for BBMI was not intended to duplicate coverage provided in §10-16-104(5), C.R.S. or provide a double benefit;
   1. 2. Treatment for BBMI under subsection §10-16-104(5.5), C.R.S. might permit “different” types of treatment than would be permitted under subsection §10-16-104(5), C.R.S. but will provide “additional” insurance benefits above the limitations set out in subsection §10- 16-104(5), C.R.S.
   2. 3. BBMI benefits in accordance with §10-16-104(5.5), C.R.S. reduce or exhaust the benefits mandated by §10-16-104(5), C.R.S.
   3. 4. The copayment or coinsurance protections of §10-16-104(5) (c), C.R.S., apply to BBMI benefits provided in accordance with §10-16-104(5.5), C.R.S.
   4. 5. BBMI benefits provided in accordance with §10-16-104(5.5), C.R.S., must be provided at the more generous of the physical illness or mental illness benefits of §10-16-104(5), C.R.S., through the 20th visit. Thereafter, only the copayment or coinsurance protections continue to apply to BBMI pursuant to §10-16-104(5.5), C.R.S., and the mental illness benefit of §10-16-104(5), C.R.S.

Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws that include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license. Among others, the penalties provided for in §10-3-1108, C.R.S. may be applied. Section 8 Effective Date This regulation shall become effective on November 1, 2009. Section 9 History Emergency Regulation 08-E-2 effective January 1, 2008.

New Regulation effective February 1, 2008.

Emergency Regulation 09-E-02 effective July 1, 2009.

Amended Regulation effective November 1, 2009.

_________________________________________________________________________ Editor’s Notes 3 CCR 702-4 has been divided into smaller sections for ease of use. Versions prior to 09/01/2011 and rule history are located in the first section, 3 CCR 702-4. Prior versions can be accessed from the History link that appears above the text in 3 CCR 702-4. To view versions effective after 09/01/2011, select the desired part of the rule, for example 3 CCR 702-4 Series 4-1, or 3 CCR 702-4 Series 4-6. History [For history of this section, see Editor’s Notes in the first section, 3 CCR 702-4]