State Marketplace Profiles: Colorado

Final update made on November 8, 2013 (no further updates will be made) 

Establishing the Marketplace

On June 1, 2011, Governor John Hickenlooper (D) signed SB 11-200 into law, establishing the Colorado Health Benefit Exchange.¹ In January 2013, the Exchange announced that the online Marketplace would be called Connect for Health Colorado (C4HCO).

Structure: The legislation defines Colorado’s Marketplace as a quasi-governmental organization, specifically a “nonprofit unincorporated public entity.”

Governance: The Marketplace is governed by a 12-member board. The Board of Directors includes three ex officio, non-voting members (or their designees): the Executive Director of the Department of Health Care Policy and Financing, the Insurance Commissioner, and the Director of the Office of Economic Development and International Trade. The Governor appoints five voting members, though no more than three from the same political party. The President of the Senate, the Speaker of the House, and the Senate and House Minority Leaders each appoint one voting member to the Board. The legislation specifies that all voting members of the Board should possess specific knowledge and skills in areas related to establishing a Marketplace, such as health benefits administration, health care finance, and/or information technology. It also requires coordination among those making the appointments to ensure the Board includes a broad representation of skill sets and that a majority of voting members are not directly affiliated with the insurance industry. Voting Board members cannot be state employees and no Board members can participate in Marketplace activities in which they have a financial interest. Current voting members of C4HCO’s Board of Directors are:

• Gretchen Hammer (Chair), Colorado Coalition for the Medically Underserved
• Richard Betts (Vice Chair), ASAP Accounting & Payroll Inc.
• Arnold Salazar (Secretary), Colorado Health Partnerships
• Ellen Daehnick, Helliemae’s Handcrafted Caramels
• Stephen ErkenBrack, Rocky Mountain Health Plans
• Dr. Michael Fallon, North Colorado Medical Center
• Eric Grossman, Independent Consultant
• Sharon O’Hara, National Multiple Sclerosis Society
• Nathan Wilkes, Headstorms Inc.

The Board of Directors determines and establishes the development, governance, and operation of the Marketplace. The Board does not have the authority to promulgate rules nor can it duplicate or replace the duties of the Insurance Commissioner, including rate approval. Instead, the legislation established the joint, bipartisan Legislative Health Benefit Exchange Implementation Review Committee to report up to five bills or other measures each year to the legislative council related to planning and establishing C4HCO. The Committee, comprised of ten legislators, is also charged with reviewing the financial and operational plans of the Marketplace and grants for which the Board has applied.

In December 2011, the Legislative Health Benefit Exchange Implementation Review Committee confirmed the Board’s nominee for Executive Director of the Marketplace.

Contracting with Plans: C4HCO will function as a clearinghouse that “foster[s] a competitive marketplace for insurance and shall not solicit bids or engage in the active purchasing of insurance. All carriers authorized to conduct business in [the] state may be eligible to participate in the Exchange.” C4HCO has partnered with the Division of Insurance (DOI), the Department of Public Health, and the Department of Health Care Policy and Finance (HCPF) to perform plan management functions. In August 2013, the DOI approved final plans and rates for 2014; information on plans offered both inside and outside the Marketplace is available on the DOI website. Ten carriers offer a total of 242 plans on the individual Marketplace and eight carriers offer a total of 92 plans on the SHOP Marketplace. Individual market offerings include two Platinum, 27 Gold, 59 Silver, 49 Bronze, and 13 Catastrophic plans. There are 26 Gold, 38 Silver, and 28 Bronze plans available through the SHOP. Carriers must submit plan and rate filings annually, and the state is divided into 11 rating areas.²

Dental and Vision Benefits: A total of nine dental carriers offer products through C4HCO. 23 qualified dental plans are available through the individual market; nine have high actuarial value (85%) and 14 are offered on the low actuarial value tier (70%). Of the 45 dental plans available through the SHOP, 21 have high actuarial value and 24 have low actuarial value.³

Risk adjustment, Reinsurance, and Risk corridors: Colorado has decided to allow the federal government to administer the risk adjustment programs for the Marketplace at least until December 2015.⁴

Consumer Assistance and Outreach: In May 2013, Colorado launched a public awareness campaign, including television, print, radio, and billboard advertisements in English and Spanish. The campaign, which lasted for two months, also established C4HCO on various social media platforms, including Twitter, Facebook, LinkedIn, and YouTube.⁵ In September, C4HCO launched a second advertising campaign that focused on providing information about how to enroll into coverage through the Marketplace and emphasized the value of having health insurance. The Marketplace is also partnering with over 100 organizations statewide and has a presence at about 30 events each week, including fairs, festivals, concerts, and sporting events, to perform education and outreach activities.⁶ In May 2013, the Marketplace launched the C4HCO website, which includes a small business tax credit calculator.

The Health Colorado Assistance Network (Assistance Network) provides assistance to consumers seeking health coverage through the Marketplace. In February 2013, the Marketplace issued a Request for Proposals (RFP) for community-based organizations to serve as Assistance Sites and Regional Assistance Hubs in the individual market, the SHOP, or both.⁷ Regional Hubs provide support, supervision, and training for Assistance Sites throughout their region, as well as assist C4HCO with communications efforts throughout the Assistance Network. Assistance Sites hire, train, and supervise Health Coverage Guides, who perform in-person education and application assistance services. In June 2013, C4HCO announced the 57 groups that have been selected to serve as Regional Hubs and Assistance Sites. The organizations received a total of $17 million in federal and private grant funding.⁸ Health Coverage Guides were trained and certified in September and provide services at over 75 locations throughout the state. An Assistance Site directory is available on the C4HCO website.

In addition, licensed agents/brokers  that complete a training course and pass a background check will be authorized to sell health insurance coverage through C4HCO. The certification training includes four to six hours online and eight hours in the classroom.⁹ Agents/brokers are compensated by carriers and will receive the same commission for products sold inside and outside the Marketplace. Brokers will participate in both the individual and SHOP Marketplaces; however, individuals and small businesses will not be required to use a broker. Broker certification began in August 2013 and by early September over 1,300 agents/brokers had taken the certification training.¹⁰ A tool on the C4HCO website allows consumers to search for an agent/broker by zip code, name, state license number, or language.

The C4HCO customer service center opened in early September and provides assistance to individuals and small employers with enrollment through website, telephone, and mail. C4HCO trained around 100 customer service representatives to provide information at different levels. Some are trained to enroll people in coverage, and all representatives will direct individuals to Health Coverage Guides in the community if requested.¹¹

Small Business Health Options Program (SHOP) Marketplace: The C4HCO Board agreed with the Department of Insurance recommendation to limit the size of the SHOP Marketplace to employers with 50 or fewer employees in 2014 and 2015. The Board recommended the state keep the individual and SHOP risk pools separate and revisit the decision at a later date.¹² The Board also agreed to allow employers to select from four options in the SHOP Marketplace; employers can choose a single QHP for all employees, choose a panel of QHPs from a single carrier that represent a range of actuarial values, offer any plan within a single metal tier, or offer any plan that is offered in two adjacent metal tiers.¹³ The Board approved a recommendation for C4HCO to establish minimum employer contribution and employee participation requirements that resemble the outside market.¹⁴

Financing: SB 11-200 prohibits Colorado from financing C4HCO using the General Fund. In March 2013, the Board approved a recommendation to assess a carrier administrative fee of 1.4% of premium for products sold on the Marketplace in 2014. In May 2013, the General Assembly passed HB 13-1245, establishing three funding mechanisms for C4HCO that will supplement the revenue generated by the assessment. HB 13-1245 imposes a broad-based assessment on carriers for individual and small group insured lives in the state. The assessment, which will be up to $1.80 per policy per month, will last for a maximum of three years. The law also shifts excess reserves to C4HCO from CoverColorado, the state’s high risk pool that will close in 2014. C4HCO will receive $15 million from CoverColorado in 2014 and $8.5 million in 2015. In June 2013, the Board set a $0 market assessment for medical and dental plans in 2014, determining that funds beyond those being transferred from Cover Colorado would not be needed for the first year of operations.¹⁵ C4HCO’s annual operating budget is expected to be around $26 million.¹⁶

Essential Health Benefits (EHB): The Affordable Care Act (ACA) requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Marketplace, cover certain defined health benefits. After soliciting comments from stakeholders and reviewing EHB options, the C4HCO Board announced a draft recommendation for Colorado’s largest small group plan, a Kaiser HMO plan.¹⁷ The Board also made a preliminary recommendation to select Colorado’s Child Health Plan Plus for supplemental pediatric dental benefits.

Marketplace Funding

The legislation prohibits appropriations of state funds for the Marketplace, though Colorado can apply for federal grant funding. The Colorado State Office of the Governor received a federal Exchange Planning grant of approximately $1 million in 2010. In February 2012, the state received a Level One Establishment grant for $17.9 million to build the operational staff and consulting support necessary to progress on key design requirements of the Marketplace. In September 2012, Colorado received a second Level One grant of $43.5 million to support technology development, specifically in order to meet deadlines for certification, testing, and deployment of systems and operations. In July 2013, Colorado received a Level Two Establishment grant for $116.2 million to support technology enhancement, develop the consumer center and education campaign, design a quality improvement program, and fund the Connect for Health Assistance Network.¹⁸

Colorado, along with nine other states, is receiving technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network; this assistance includes help with setting up health insurance Marketplaces, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions.¹⁹

Next Steps

On December 7, 2012, Colorado received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a State-based Marketplace.²⁰ The Connect for Health Colorado portal became operational on October 1 and began enrolling qualified individuals, families, and small businesses into coverage.

Additional information about Connect for Health Colorado can be found at http://www.connectforhealthco.com/