Colorado Option Regulations: Plan Design and Premium Rate Reduction Requirements for Plan Year 2024
The Colorado Division of Insurance (DOI) adopted emergency regulations establishing the standardized plan designs and methodology for calculating premium rate reductions for the Colorado Option offered in plan year 2024.
Emergency Regulation 23-E-01: Establishes rules for the required Colorado Option standardized bronze, silver, and gold health benefit plans.
Emergency Regulation 23-E-02: Establishes the methodology for carriers to calculate premium rate reductions for Colorado Option standardized health benefit plans.
The emergency regulations implement the Draft 2024 Actuarial Value Calculator Methodology developed by the Department of Health and Human Services, which account for changes in medical and drug spending from plan year 2023 and other trend and projection factors. Carriers were required to notify DOI by March 1, 2023 on whether their plans for plan year 2024 comply with the premium rate reduction requirements and network adequacy requirements.
For the most part, the emergency regulations mirror regulations adopted for plan year 2023. Covered benefits and member cost sharing (copays and coinsurance) do not change in plan year 2024. The main difference is the actuarial value across the gold, silver, and bronze metal tiers, which impacts the deductible and out-of-pocket maximum for an individual and family as well as the maximum premium that a carrier can charge. As noted in Table 1 and Table 2, the actuarial value of plans across all metal tiers is slightly lower in plan year 2024 than in plan year 2023, meaning the plans are less generous for consumers who will face greater deductibles and out-of-pocket maximums.
Carriers are required to offer a standardized plan in plan year 2024 with a premium that is reduced by 10 percent relative to their 2021 premiums. DOI published maximum premium targets that a new carrier and existing carriers can charge on its Colorado Option plan in the individual market and small group market, by metal level and county, using a methodology developed by the Wakely Consulting Group. The targets do not account for reinsurance, which can further reduce premiums.
