Common Requirements for Sickness and Accident Insurance

Sickness and Accidents

Colorado law requires Accident & Health (A&H) policies to include specific mandated benefits, standards of coverage, and consumer protections. These statutory requirements ensure equitable access to essential health services and impose fair business practices on insurers.

Maternity and Newborn Coverage

Ref: 10-16-104(1); 10-16-104(3)

• All individual and group health insurance policies must provide maternity coverage.

• Coverage for newborn children begins at birth and includes:

  • Injury or sickness, including congenital defects
  • Illness
  • Preventive care

• To continue newborn coverage beyond the initial period, the policyholder must add the child within the insurer’s required timeframe (commonly 30–60 days).

Complications of Pregnancy

Ref: 10-16-104(2)

• Complications of pregnancy must be treated as any other illness.
• Examples include ectopic pregnancy, hemorrhage, preeclampsia, and other medically diagnosed conditions.
• Insurers cannot apply separate or more restrictive limits.

Mammography and Prostate Screening Benefits

Ref: 10-16-104(10); 10-16-104(18)

Colorado mandates coverage for:

• Mammograms: Baseline and periodic screenings based on age and risk factors.

• Prostate screenings: Including PSA tests and digital rectal exams. These benefits must be provided with reasonable cost-sharing and cannot be excluded.

Diabetes Coverage

Ref: 10-16-104(13); 10-16-151

Policies must cover:

• Diabetes self-management education
• Equipment and supplies
• Prescription medications (insulin and non-insulin)
• Nutrition counseling The law prohibits discriminatory coverage limits for diabetic care.

Hospice Care and Home Health Care

Ref: 10-16-104(8); Reg. 4-2-8

Policies must include:

• Hospice care for terminally ill insureds
• Home health care services, including nursing visits, therapies, and medical supplies Limits must be reasonable and cannot unfairly restrict medically necessary care.

Guaranteed Renewability

Ref: 10-16-105.1

Individual health benefit plans must be guaranteed renewable, except for specific reasons, such as:

• Nonpayment of premium
• Fraud or intentional misrepresentation
• Discontinuation of the policy form
• Insured moving outside the service area Insurers cannot cancel coverage due to health conditions.

Prompt Pay Requirements

Ref: 10-16-106.5; Reg. 4-2-24

Colorado’s Prompt Pay Laws require:

• Payment, denial, or audit notification within statutory timeframes.
• Clean claims must be paid within:
  • 30 days for electronic claims
  • 45 days for paper claims
• Interest penalties apply for late payments.

Utilization Review (UR)

Ref: 10-16-113; 10-16-113.5; Reg. 4-2-17; 4-2-21; 4-4-5

• UR governs how insurers evaluate medical necessity.

Requirements include:

• Timely decision-making
• Qualified clinical reviewers
• Clear communication of adverse determinations
• A multi-level appeal process, including external review for denied claims

Mandated Benefits

Ref: 10-16-104; 4-2-28; 4-2-30

Examples include:

• Cancer screenings
• Reconstructive surgery after mastectomy
• Behavioral health treatment
• Pediatric services
• Chiropractic services (as required in specific plans)

Essential Health Benefits (EHBs)

Ref: 10-16-102(22); 10-16-103.4; Reg. 4-2-42

Under the ACA and Colorado benchmark plan:

• Individual and small group policies must include all 10 categories of EHBs, such as hospitalization, prescription drugs, maternity care, mental health, pediatric services, and more.

Individual Coverage Requirements

Required Provisions

Ref: 10-16-202

Individual A&H policies must include standard provisions such as:

• Entire contract clause
• Grace period
• Reinstatement
• Time limit on defenses
• Notice of claim
• Proof of loss
• Legal action clause

Replacement Requirements

Ref: 10-16-202; Reg. 4-2-1

When replacing an individual health policy:

• The producer must ensure the applicant is not misled.

• Written replacement forms must be used.

• The insurer must review the replacement to ensure suitability.

• Preexisting condition limitations cannot be reset for fraudulent replacements.

Grace Period

Ref: 10-16-140; Reg. 4-2-48

Grace period minimums:

• Monthly premium: 10 days
• Quarterly, semiannual, or annual premium: 31 days Coverage remains in force during the grace period.

Termination of Coverage

Ref: 10-16-222; 10-16-325; 10-16-429

Permitted reasons for termination include:

• Nonpayment of premium
• Fraud or misrepresentation
• Loss of eligibility
• Discontinuation of a product line Advance notice requirements apply (typically 30 days).

Enrollment Periods

Ref: 10-16-105.7; Reg. 4-2-43

• Colorado mandates
• Open enrollment periods

Special Enrollment Periods (SEPs) for qualifying life events such as:

• Marriage
• Birth or adoption
• Loss of other coverage
• Change in residence Insurers must clearly disclose enrollment rules to consumers.

Group Coverage Requirements

Continuation Coverage

Ref: 10-16-108(1)

Colorado continuation applies to group plans similar to COBRA but with state-specific enhancements. Employees may continue coverage for a defined period after:

• Terminating employment
• Reduction in hours
• Loss of eligibility

Maternity Coverage

Ref: 10-16-104(3) Group plans must include maternity benefits without restrictive limitations.

Mental Health Coverage

Ref: 10-16-104(5.5); Reg. 4-2-64

Colorado enforces mental health parity, requiring coverage for:

• Behavioral health
• Substance use disorder services
• Autism spectrum disorder treatments Cost-sharing must match medical/surgical benefits.

Leasing companies

Ref: 10-16-105.6; 10-16-214(5); Reg. 4-6-10

Employee leasing companies (PEOs) must:

• Properly classify eligible employees
• Maintain compliant group health arrangements
• Follow rating and participation requirements

Small Group Coverage

Definitions

Ref: 10-16-102(18); 10-16-102(61–63); 10-16-105.2; Reg. 4-6-8

• Small employer: Typically 1–100 employees.

• Eligible employee: Works at least the minimum hours set by statute (usually 20+ hours/week).

Guaranteed issue, Open enrollment, and Special enrollment

Ref: 10-16-105; 10-16-105.7; Reg. 4-2-43

Insurers must:

• Accept all small employers who apply (Guaranteed Issue)
• Permit annual open enrollment
• Offer SEPs for qualifying events

Rating Factors

Ref: 10-16-102(9); 10-16-105.6

Permissible rating factors include:

• Age
• Geographic area
• Tobacco use
• Family composition Insurers may not use health status, claims experience, or gender.

Participation Requirements

Ref: 10-16-102(61); 10-16-105(3); Reg. 4-6-8

Small groups must meet minimum participation levels to qualify, such as:

• A percentage of eligible employees enrolling (commonly 70%–75%).
• Waivers count toward participation.

Fair Marketing Standard

Ref: 10-16-108.5; Reg. 4-2-20

Producers and insurers must:

• Use clear, accurate marketing materials
• Avoid misleading statements
• Disclose plan limitations and costs
• Ensure fair sales practices
• Violations may result in fines and disciplinary actions.

Specified Health Insurance Products

Medicare Supplement Insurance

Ref: 10-18-101(4); 10-18-103; 10-18-106(1)-(2); 10-18-107; 10-18-108; 10-18-109; Reg. 4-3-1; 4-3-2

Requirements Include:

• Standardized benefit plans
• Guaranteed issue for eligible individuals
• Prohibition of duplicate coverage
• 30-day free-look period
• Loss-ratio standards
• Strict advertising rules

Long-Term Care (LTC)

Ref:10-19-101 through 115; Reg. 4-4-1; 4-4-4; 4-4-5

• Colorado LTC Requirements:
• Suitability standards
• Inflation protection offerings
• Required disclosures
• Shopper’s Guide distribution
• Nonforfeiture options
• Training requirements for producers

Benefit Plan Description

Ref: 10-16-108.5(11); Reg. 4-2-20

Insurers Must Provide Clear Benefit Plan Descriptions, Including:

• Covered services
• Exclusions
• Cost-sharing
• Appeals processes
• Network information

Commission Disclosure

Ref: 10-16-133; Reg. 1-2-17 Producers must disclose:

• The amount or method of compensation
• Additional bonuses or overrides
• Conflicts of interest Disclosure must occur at the time of application or before enrollment.

Sales and Marketing of Health Insurance

Ref: 10-16-105.2; Reg. 4-2-1; 4-2-3; 4-3-1; 4-3-2; 4-4-1; 4-6-8

Producers must follow Colorado’s marketing and sales rules, including:

• Providing all required disclosures
• Ensuring applicant suitability
• Avoiding misrepresentations
• Following replacement rules
• Maintaining required training (including LTC & Medicare Supplement when applicable)
• Using compliant advertising and illustrations