Colorado Mandates Higher Health Care Costs for Small Business Owners and their Employees.

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The Colorado Division of Insurance has mandated that Colorado Insurance Companies raise deductibles and out of pocket maximums by thousands of dollars a year. The move comes with less than 30 days notice and no approval from the Colorado legislature. Based on the family deductible change from the $2,000 per year to $4,500 per year this move may pose a burden to the recovering Colorado Economy.

I agree. This is disturbing. The regulation to which you refer (4-6-5) was promulgated by the Department of Regulatory Agencies Division of Insurance. They work for Gov. Owens. They receive statutory guidance from the legislature, but the legislature did not

A recent move by the Colorado Division of Insurance, in amending Colorado Division of Insurance Regulation 4-6-5 has passed a massive increase in the out of pocket health care costs for many small business owners and their employees. The move, which was announced less than 30 days before Christmas is certain to cost many small business owners and employees thousands of dollars a year.

The state of Colorado, like many other states, has a board of insurance that regulates matters of insurance. This board operates with little oversight from the Colorado legislature or Governors office. According to a contact at the Division of Insurance, the recent changes were made to make good with the insurance companies who were forced to accept groups of one and forced to approve most business applicants.

The amended regulation deals with state regulated plans commonly referred to as the Basic and the Standard PPO plans. These plans were introduced in an effort by the state to provide better health care options to small business owners. The plans provided for guaranteed approval, lower deductibles and lower out of pocket expenses.

The recent changes, which come with little notice, change all that. For example, a single mom, employed by a small business with the Standard PPO plan will see her family deductible change from the $2,000 per year to $4,500 per year. That same single mom on the basic plan would be considerably higher. If the family happens to go to a doctor that is not a preferred provider the deductible changes from $4000 to $9,000.

“I am absolutely amazed that in a state where a referendum that would cost residents a few hundred dollars is all over the news, the fact that an unelected division of government costing those who can afford it least thousands of dollars is getting no attention,” stated Justin Krauss, Operations Manager, for JNK Products, LLC.

JNK Products, a Small Colorado Limited Liability Company, has been trying to draw attention to the issue for over a week. According to Krauss, JNK Products has contacted every member of the state legislature as well as Senator Allard and Salazar. Additionally, according to Krauss, many members of the media have been contacted about the story as well.

“Much to my surprise, only two members of the state legislature have commented on the issue. The governor has refused to comment and on a national level Senator Allard’s office stated that they do not get involved in states issues and Senator Salazar did not return calls on the issue,” states Krauss.

Senator Brandon Shafer replied to an inquiry from JNK Products stating “I agree. This is disturbing. The regulation to which you refer (4-6-5) was promulgated by the Department of Regulatory Agencies Division of Insurance. They work for Gov. Owens. They receive statutory guidance from the legislature, but the legislature did not "change the law" directing them to make the changes they made here.

Frankly, I don't know why these changes were made. Please give me some time to look into this and try to figure out what's going on.”

According to Krauss the media has not brought this issue into the light either. While Krauss brought this issue to the local and state newspapers, and some newspapers had expressed some interest, to date, none of the papers have run with the issue. Additionally Krauss brought the matter to the local TV stations that have all but ignored the information provided by Krauss. “Even the Fox News Reporter who claims to be looking out for you has expressed no interest in the issue,” explained Krauss

In fact, the only ally JNK products has been able to locate comes from what some might consider to be an unlikely source: The insurance company. According to Michelle Snyder, Director/Marketing Operations & Product Development for Rocky Mountain Health Plans they did not receive notice about the change until November 21, 2005 and they were unable to send notice to their affected subscribers until December 5, 2005 for changes that will take place on January 1, 2006.

Snyder offered to allow JNK Products to opt out of their contract early and choose a plan better suited for their staff. Snyder worked diligently according to Krauss to find a plan in the same price range with similar benefits to the plan they were on before.

“We at JNK Products publicly call on the state legislature to pass a resolution condemning the actions of the Colorado Division of Insurance. Additionally, we ask the legislature to pass legislation that would enact the following changes (1) The Colorado Division of Insurance must provide 180 days notice before amending regulation 4-6-5 or any other regulation in such away that it would increase out of pocket health care costs by more than 10%. (2) Any changes mandating a change of greater than 10% out of pocket costs must receive approval of the state legislature (3) Amend regulation 4-6-5 requiring insurance companies to have the same renewal and contract dates for any plans regulated by the state of Colorado. The present wording allows insurance companies to change benefits as of the renewal date while not allowing small businesses to change plans until their contract anniversary date. (4) Require notice be sent to policy holders when rules changes are being considered and allow for a 90 day public comment period before any changes can go into affect,” states Krauss

For more information about the issue you can contact your local insurance agency or The Colorado Division of Insurance. Additionally the amended regulations as well as Rocky Mountain Health Care’s summary of the changes are attached.

To Contact Justin Krauss, the author of this article, please call 970-245-1416 Extension 101

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