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The Colorado Division of Insurance is considering a “Proposed” Amended Regulation 4-2-39, Section 11 to allow composite rating in the small group market. Currently, the DOI requires age-banded premiums for the small group market (includes Colorado employers with 2 up to 100 employees).

If passed, the DOI said this amendment would be effective January 1, 2016. All carriers that filed with composite rates would be allowed to use them January 1, 2016. They indicated that most carriers usually file age banded and composite rates. The carriers that did not file composite rates would be permitted to re-file.


The DOI would also require the following for carriers that choose to offer composite rates:

  • Must be available for all size small groups (2-100)

  • Once composite rates are calculated at the beginning of the plan year, they cannot change during the plan year, regardless of census changes within the group.

  • Carriers may decide which plans will offer composite rates and which will not.

  • Rates calculated must use the per-member methodology.

  • All carriers would be required to use the following standard tier definitions and factors:

  • Employee Only – 1.00

  • Employee and Spouse - 2.00

  • Employee and Child(ren) - 1.85

  • Family - 2.85

  • Any allowable tobacco use factor would have to be allocated separately to the corresponding individual employee or dependent, so the average Employee Only premium would not include any tobacco factor.


At the time of the initial hearing, there appeared to be support for the amendment with approval likely; however, it is unclear how the recent PACE Act decision may affect the status of this proposed amendment. 360benefits will continue to keep you updated as we hear.

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