BY REPRESENTATIVES Owen, Anderson, G. Berry, Dean, Entz, Mace, May, Musgrave, Paschall, Schwarz, Smith, Taylor, Tool, and Young;
also SENATORS Rizzuto and Schroeder.
CONCERNING INDIVIDUAL HEALTH BENEFIT PLANS ISSUED
TO BUSINESS GROUPS OF ONE.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. 108601.5
(1) (c), Colorado Revised Statutes, 1994 Repl. Vol., as amended,
is amended, and the said 108601.5 is further amended
BY THE ADDITION OF A NEW SUBSECTION, to read:
108601.5. Applicability
and scope. (1) (c) (I) EFFECTIVE
OCTOBER 1, 1997, the provisions of this article and article 16
of this title concerning small employer carriers and small group
plans shall not apply to an individual health benefit plan NEWLY
issued to a business group of one on
or before December 31, 1995, and in force on and after January
1, 1996, as long as the business group of one maintains continuous
coverage on that individual health benefit plan with no changes
in plan design or benefits and continues to meet the definition
of a business group of one. Such a plan shall be regulated as
an individual health benefit plan.
THAT INCLUDES ONLY A SELFEMPLOYED PERSON WHO HAS NO EMPLOYEES,
OR A SOLE PROPRIETOR WHO IS NOT OFFERING OR SPONSORING HEALTH
CARE COVERAGE TO HIS OR HER EMPLOYEES, TOGETHER WITH THE DEPENDENTS
OF SUCH A SELFEMPLOYED PERSON OR SOLE PROPRIETOR IF, PURSUANT
TO RULES ADOPTED BY THE COMMISSIONER, ALL OF THE FOLLOWING CONDITIONS
ARE MET:
(A) AS PART OF THE APPLICATION PROCESS,
THE CARRIER DETERMINES WHETHER OR NOT THE APPLICANT IS A SELFEMPLOYED
PERSON WHO MEETS THE DEFINITION OF A BUSINESS GROUP OF ONE PURSUANT
TO SECTION 108602 (2.5).
(B) IF THE APPLICANT IS A BUSINESS GROUP
OF ONE SELFEMPLOYED PERSON, THE CARRIER ACCEPTS OR REJECTS
SUCH PERSON AND, IF SUCH PERSON IS APPLYING FOR FAMILY COVERAGE,
ACCEPTS OR REJECTS THE ENTIRE FAMILY UNLESS THE APPLICANT WAIVES
COVERAGE FOR A FAMILY MEMBER WHO HAS OTHER COVERAGE IN EFFECT.
(C) FOR AT LEAST THE FIRST THREE YEARS
AFTER THE INITIAL EFFECTIVE DATE OF THE POLICY, THE PERCENTAGE
INCREASE IN RATES UPON RENEWAL FOR PLANS SOLD TO BUSINESS GROUPS
OF ONE REMAINS THE SAME AS THE AVERAGE PERCENTAGE INCREASE IN
RATES UPON RENEWAL FOR AN INDIVIDUAL HEALTH CARRIER'S ENTIRE BOOK
OF INDIVIDUAL HEALTH BENEFIT PLANS SOLD TO BUSINESS GROUPS OF
ONE IN COLORADO, EXCLUDING CHANGES ATTRIBUTABLE TO DEMOGRAPHICS.
(D) IF THE CARRIER REJECTS AN APPLICATION
FOR A BUSINESS GROUP OF ONE SELFEMPLOYED PERSON AND THE
CARRIER DOES BUSINESS IN BOTH THE INDIVIDUAL AND SMALL GROUP MARKETS,
THE CARRIER OFFERS TO ISSUE THAT GROUP A CHOICE OF COVERAGE UNDER
THE SMALL GROUP BASIC OR STANDARD HEALTH BENEFIT PLAN PURSUANT
TO THE RULES GOVERNING SMALL GROUP POLICIES.
(E) AS PART OF ITS APPLICATION FORM, AN
INDIVIDUAL CARRIER REQUIRES A BUSINESS GROUP OF ONE SELFEMPLOYED
PERSON PURCHASING AN INDIVIDUAL HEALTH BENEFIT PLAN PURSUANT TO
THIS SUBPARAGRAPH (I) TO READ AND SIGN A DISCLOSURE FORM STATING
THAT, BY PURCHASING AN INDIVIDUAL POLICY INSTEAD OF A SMALL GROUP
POLICY, SUCH PERSON GIVES UP WHAT WOULD OTHERWISE BE HIS OR HER
RIGHT TO PURCHASE A BUSINESS GROUP OF ONE STANDARD, BASIC, OR
OTHER HEALTH BENEFIT PLAN FROM A SMALL EMPLOYER CARRIER FOR A
PERIOD OF THREE YEARS AFTER THE DATE THE INDIVIDUAL HEALTH BENEFIT
PLAN IS PURCHASED, UNLESS A SMALL EMPLOYER CARRIER VOLUNTARILY
PERMITS SUCH PERSON TO PURCHASE A BUSINESS GROUP OF ONE POLICY
WITHIN SUCH THREEYEAR PERIOD. THE DISCLOSURE FORM SHALL
ALSO SHOW HOW THE BENEFITS OF THE INDIVIDUAL HEALTH BENEFIT PLAN
BEING MARKETED DIFFERS FROM THE STANDARD HEALTH BENEFIT PLAN AND
SHALL EXPLAIN THE DIFFERENCES BETWEEN HOW SMALL GROUP AND INDIVIDUAL
HEALTH BENEFIT PLAN RATES ARE SET.
(F) THE APPLICATION TO BE FILLED OUT BY
THE BUSINESS GROUP OF ONE SELFEMPLOYED PERSON INCLUDES THE
FOLLOWING CERTIFICATION TO BE SIGNED AND FILLED OUT BY A REPRESENTATIVE
OF THE CARRIER: "I, [NAME OF REPRESENTATIVE], ACTING ON BEHALF
OF [NAME OF CARRIER], CERTIFY THAT THE MARKETING AND SALE OF THIS
INDIVIDUAL HEALTH BENEFIT PLAN COMPLIES WITH ALL OF THE PROVISIONS
OF SECTION 108601.5 (1) (c) (I), COLORADO REVISED
STATUTES, CONCERNING THE SALE OF INDIVIDUAL COVERAGE TO A BUSINESS
GROUP OF ONE. IF THIS IS NOT THE CASE, I UNDERSTAND THAT THIS
PLAN MAY BE REGULATED AS A SMALL GROUP HEALTH PLAN.".
(G) BEFORE MARKETING OR SELLING INDIVIDUAL
HEALTH BENEFIT PLANS TO BUSINESS GROUP OF ONE SELFEMPLOYED
PERSONS, AND ON OR BEFORE MARCH 1 OF EACH YEAR DURING WHICH IT
MARKETS OR SELLS SUCH PLANS, THE INDIVIDUAL CARRIER PROVIDES TO
THE COMMISSIONER DOCUMENTATION THAT IT MEETS THE CONDITIONS OF
THIS SUBPARAGRAPH (I) AND SUBMITS DATA ON THE NUMBER OF BUSINESS
GROUPS OF ONE COVERED.
(II) Nothing in this paragraph (c) shall
preclude a business group of one from applying for small group
coverage.
(3) EFFECTIVE OCTOBER 1, 1997, PURSUANT
TO RULES ADOPTED BY THE COMMISSIONER, A SMALL EMPLOYER CARRIER
MAY REJECT FOR COVERAGE UNDER A SMALL GROUP PLAN A BUSINESS GROUP
OF ONE SELFEMPLOYED PERSON IF, AT THE TIME OF APPLICATION
FOR GROUP COVERAGE, THE SELFEMPLOYED PERSON HAS IN PLACE
OR, WITHIN THE IMMEDIATELY PRECEDING THIRTY DAYS, HAS HAD IN PLACE
AN INDIVIDUAL HEALTH BENEFIT PLAN THAT MEETS THE REQUIREMENTS
OF SUBPARAGRAPH (I) OF PARAGRAPH (c) OF SUBSECTION (1) OF THIS
SECTION AND HAS BEEN IN PLACE FOR LESS THAN THREE YEARS.
SECTION 2. Safety
clause. The general assembly hereby finds, determines, and
declares that this act is necessary for the immediate preservation
of the public peace, health, and safety.
____________________________ ____________________________
Charles E. Berry Tom Norton
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Judith M. Rodrigue Joan M. Albi
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE OF COLORADO