Key Takeaways
- Colorado requires group life insurance policies to include a conversion privilege within 31 days of coverage termination
- Small group health insurance in Colorado applies to employers with 1-100 employees
- Colorado prohibits pre-existing condition exclusions in the small group market under ACA requirements
- Group health plans must provide certificates of coverage to all enrolled employees
- Colorado law requires mental health parity in group health insurance plans
Colorado Group Life and Health Insurance Requirements
Colorado regulates group life and health insurance to protect employees and ensure access to coverage.
Group Life Insurance Requirements
Conversion Privilege
Colorado requires group life policies to include a conversion privilege:
| Requirement | Details |
|---|---|
| Who Qualifies | Employees losing group coverage |
| Conversion Period | 31 days from termination |
| No Underwriting | Cannot require proof of insurability |
| Premium | Standard individual rates for age |
| Coverage Amount | Up to amount of group coverage |
When Conversion Rights Apply
Employees have conversion rights when:
- Employment terminates (any reason)
- Employee retires
- Employee's class is eliminated
- Group policy terminates (with notice)
- Dependent loses coverage
Exam Tip: The 31-day conversion period is key. During this time, employees remain covered under the group policy even if they haven't yet applied to convert.
Death During Conversion Period
If an employee dies during the 31-day period:
- Group coverage still applies
- Death benefit paid as if coverage continued
- Conversion application status irrelevant
Small Group Market Definition
Colorado Small Group
| Market | Employee Count |
|---|---|
| Small Group | 1-100 employees |
| Large Group | 101+ employees |
Small Group Protections
Colorado small groups enjoy:
- Guaranteed issue (cannot deny coverage)
- No pre-existing condition exclusions
- Essential health benefits
- Community rating (within age bands)
- Guaranteed renewal
Certificate of Coverage Requirements
Colorado requires group policies to provide certificates:
Required Certificate Contents
| Element | Description |
|---|---|
| Benefits Summary | What the plan covers |
| Eligibility Rules | Who is covered |
| Effective Dates | When coverage begins/ends |
| Conversion Rights | How to convert to individual |
| Continuation Rights | COBRA and state options |
| Claims Procedures | How to file claims |
| Appeal Rights | How to appeal denials |
| Contact Information | Insurer and administrator |
Certificate Timing
- Provided within 30 days of coverage
- Updated for material changes
- Summary of Benefits and Coverage (SBC) also required
Mental Health Parity
Colorado requires mental health parity in group plans:
Parity Requirements
| Requirement | Details |
|---|---|
| Coverage Level | Same as medical benefits |
| Cost Sharing | Same copays, deductibles |
| Visit Limits | Cannot be more restrictive |
| Prior Authorization | Same process as medical |
Covered Conditions
Colorado parity covers:
- Mental illness and disorders
- Substance use disorders
- Behavioral health conditions
- Same coverage as physical illness
Dependent Coverage
Age 26 Rule
Colorado follows federal requirements:
| Requirement | Details |
|---|---|
| Age Limit | Coverage to age 26 |
| Marital Status | Doesn't matter |
| Student Status | Doesn't matter |
| Financial Dependence | Doesn't matter |
| Own Coverage | Can still be on parent's plan |
Domestic Partner Coverage
Colorado allows but does not mandate domestic partner coverage:
- Employer choice to offer
- If offered, same benefits as spouse
- Different tax treatment than spouse
Coordination of Benefits
When employees have multiple coverage:
Colorado Coordination Rules
| Situation | Primary Plan |
|---|---|
| Employee's own plan | Primary for employee |
| Employee as dependent | Primary plan pays first |
| Children (birthday rule) | Parent with earlier birthday |
| Divorced parents | Court order or specific rules |
Birthday Rule
The birthday rule uses:
- Parent's birthday month and day (not year)
- Earlier birthday in calendar year = primary
- If same birthday, longer coverage = primary
Employer Contribution Requirements
Participation Requirements
| Contribution | Minimum Participation |
|---|---|
| Employer-paid (100%) | 100% eligible employees |
| Contributory | Typically 75% |
Small Employer Flexibility
Small employers may have:
- Lower participation requirements
- Guaranteed issue regardless
- Cannot be charged more for low participation
Group Health Continuation
Colorado provides continuation options:
For Employers 20+ Employees
Federal COBRA applies:
- 18-36 months continuation
- Up to 102% of premium
For Employers Under 20 Employees
Colorado Mini-COBRA:
- State continuation rules apply
- Similar to federal COBRA
- DOI oversight
Exam Tip: Know that Colorado follows federal COBRA for employers with 20+ employees, while smaller employers are covered by state continuation rules.
How long do employees have to convert group life insurance in Colorado?
What is the small group market size in Colorado?
Under the birthday rule for coordination of benefits, which parent's plan is primary?
What happens if an employee dies during the 31-day conversion period?
Does Colorado require mental health parity in group health plans?