SB 24-073

Senate Bill 24-073 changes the definition of a "small employer" in Colorado for health insurance purposes. Starting January 1, 2026, a small employer will be any business that averages between one and 50 employees annually, down from the current range of one to 100 employees. Employers who currently have small group health plans but won't qualify as small employers under the new definition can keep their plans for five years after January 1, 2026, with some limitations on plan changes. The bill also requires an actuarial review to ensure that the change doesn’t increase premiums by more than 3% for most people in small group health plans; if it does, the new definition won't take effect. Governor Jared Polis signed this bill into law on May 1, 2024.

Official Summary

For the purpose of providing health insurance coverage, current law defines a "small employer" as any individual, firm, corporation, partnership, or association that employs between one and 100 employees during a calendar year. Effective January 1, 2026, the act amends the definition to define a "small employer" as any person that employs an average of at least one but not more than 50 employees during a calendar year. An employer that has a small group health benefit plan before January 1, 2026, and would no longer qualify as a "small employer" under the changes made by this act may elect to keep their small group health benefit plan for 5 years after the date of issuance. Such employer may also switch between small group health benefit plans offered by the carrier during those 5 years, but may only switch to plans that are one metal level above or below their existing plan. Once an employer elects to enter the large group health benefit market, the employer may not return to the small group health benefit market within the 5-year period. The act requires the commissioner of insurance to conduct an actuarial review of rate filings submitted by insurance carriers that offer small group health benefit plans to determine whether the change to the definition of "small employer" made by the act would increase premiums for the majority of individuals covered by small group health benefit plans by more than 3%. If the premiums would increase by more than 3%, then the change to the "small employer" definition made by the act is repealed. APPROVED by Governor May 1, 2024 PORTIONS EFFECTIVE May 1, 2024 PORTIONS EFFECTIVE January 1, 2026(Note: This summary applies to this bill as enacted.)

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