Colorado Passes Stop Loss Insurance Restrictions

The Colorado House of Representatives has approved legislation that would restrict stop-loss insurance sold to small employers.

The bill, H.B. 13-1290, would amend Colorado’s existing laws by establishing minimum specific attachment points of $20,000 for medical stop-loss coverage sold to self-insured employers with 50 or fewer full-time workers. It also would set minimum aggregate attachment points of 120% of expected claims or $20,000, whichever is lower.

The bill would prohibit insurers from setting attachment points that vary by individual plan participants within an insured group for claims incurred per individual.

A previous version of the bill would have set the minimum specific attachment points at $30,000. The amended version was approved April 16 by the Colorado House Health, Insurance and Environment Committee, and on Monday passed the full Colorado House by a 45-15 vote.

Mandatory insurer reporting

Under the plan, insurers in Colorado would be required to file annual reports with the state’s insurance commissioner that detail their portfolio of stop-loss clients with 100 or fewer employees. The reports would need to include the total number of covered lives, the mean and median attachment points, and sources of prior coverage held by the stop-loss clients.

The proposal also would give the state’s insurance commissioner license to unilaterally change minimum attachment points going forward, based on medical cost inflation.

A spokeswoman for state Rep. Elizabeth McCann, D-Denver, the bill’s primary sponsor, said the bill must be introduced in the Colorado Senate prior to the legislature’s May 8 recess to remain alive this session.