How small group health insurance works in Colorado

By each person’s age and by the rating area your business is in, and not by anybody’s health. A carrier can’t charge your group more because somebody is sick, or turn the group down over it.

• Age. Every person on the plan has their own rate, set by their age. That’s why the same plan costs a young team far less than an older one, and why a renewal rises a little each year even when nothing else changes.
• Where you work, not where they live. Rates follow the business’s ZIP code. Larimer, Weld and Boulder counties are three different rating areas, and an employee who commutes in from another county is priced at yours.
• Tobacco. The carriers selling small group here don’t currently add a tobacco charge, so we don’t ask about it.

What you pay then depends on the plan you pick and how much of each employee’s premium you cover, which is the next question.

Colorado doesn’t set either number. Under C.R.S. 10-16-105 each carrier sets its own minimum participation and employer contribution, applied the same way to every employer of the same size. In practice the carriers here range from asking for no employer contribution at all to asking you to pay up to half of each employee’s premium, and their participation rules run from no minimum at all to most of your eligible employees enrolled.

Three things make that easier to meet than it sounds:

• Other coverage comes off the top. By law, employees with other coverage they already had are left out when participation is counted. Somebody on a spouse’s plan at work is the usual example. Carriers usually treat Medicare and Health First Colorado (Medicaid) the same way.
• The rule is the same for every group your size at that carrier. A carrier can’t set a harder target for your business because of who works there.
• It can’t move on you later: a carrier cannot raise its participation or contribution requirement after it accepts the group.

If you still can’t meet a carrier’s rules, there is a window each year when they don’t apply.

Every year from November 15 to December 15, a business that doesn’t meet a carrier’s participation or contribution rules can still buy a small group plan. Federal rules (45 CFR 147.104) make carriers accept the group in that window, and carriers start that coverage January 1.

It’s the door for the business with three employees where two are covered by a spouse’s plan, or the owner who wants to offer coverage without promising to pay half of it. Outside the window the same group can be turned down.

Yes. Colorado law says every small-group carrier must offer the standardized plan in every county where it sells small group, alongside its other plans, and the plan is built to a design the state sets.

The standardized design makes these the easiest small group plans to compare across carriers. Whether a Colorado Option plan is the right buy for your group comes down to the network and the price in your county, as with any other plan.

A group plan can start on the first of any month, and at some carriers on the fifteenth, and a new hire can wait no more than 90 days before their coverage begins.

• Your start date. Outside the November window you can start a plan in any month. Allow a few weeks for quotes, a decision and the application.
• The waiting period. You choose it, from none up to the limit, and it has to apply the same way to everyone in the same class of employee. The first of the month after hire is a common choice.

They can usually keep the group plan for a while at their own cost. Two rules give them that right, and a group can fall under either.

Federal COBRA reaches employers with 20 or more employees. Colorado’s own continuation rule (C.R.S. 10-16-108) reaches insured group plans and names no employer size. Under it, an employee covered for at least 6 months before leaving can stay on for up to 18 months, or until other group coverage starts. The person continuing pays the premium, not you.

A departing employee can also buy an individual plan, often with help from Connect for Health Colorado, and that can cost them less than continuing. What we tell people losing employer coverage.

At a business with fewer than 20 employees, Medicare pays first for a worker who is 65 or older and your group plan pays second (42 U.S.C. 1395y(b)(1)(A)(ii)). At 20 or more, the group plan pays first.

That changes the advice for an older employee at a small company: somebody who stays on your plan without enrolling in Medicare can find the plan paying only its second share of a claim. They can also choose Medicare instead of your plan, and carriers usually leave them out of your participation count when they do.

We help with both sides of it. Medicare and coverage from work is written for the employee.

Some can, but only for coverage bought through the federal Small Business Health Options Program (SHOP). Colorado has no SHOP storefront of its own: Connect for Health Colorado sends employers who want SHOP coverage to Kaiser Permanente or Delta Dental directly. Kaiser Permanente is the only one of the two selling medical plans.

Under 26 U.S.C. 45R the credit is for employers with fewer than 25 full-time-equivalent employees and modest average wages (under $68,200 for 2026), who pay at least 50% of each employee’s premium. It lasts 2 consecutive years, once.

Whether it outweighs choosing from every carrier is a question for your tax preparer and us together: we can tell you what the plans cost, and they can tell you what the credit is worth to you.

A level-funded plan is a group plan where you pay a fixed monthly amount covering claims, administration and insurance against a bad year, and some of the money can come back if your group’s claims run low. It falls between a regular insured plan and a company paying its own claims.

• Size. Most carriers start from about five enrolled employees, and some from two.
• Health questions. Unlike a regular small group plan, the price usually depends on a short health form each employee fills in, so a group with a serious illness may be quoted high or not at all.

For a young, healthy group it can cost less than a regular plan. For anybody else it’s a bet on next year’s claims, and we’ll say which one we think you are.