CO Code § 10-16-214 (2021)
2021 Colorado Code|Title 10 - Insurance|Article 16 - Health Care Coverage|Part 2 - Sickness and Accident Insurance|§ 10-16-214. Group Sickness and Accident Insurance

  Group sickness and accident insurance is declared to be that form of sickness and accident insurance covering groups of persons, with or without their dependents, and issued upon the following bases:   Under a policy issued to an employer, who shall be deemed the policyholder, insuring at least ten employees of such employer for the benefit of persons other than the employer. The term “employees”, as used in part 1 of this article and this part 2, includes the officers, managers, and employees of the employer, the bona fide volunteers if the employer is an emergency service provider, the partners if the employer is a partnership, the officers, managers, and employees of subsidiary or affiliated corporations of a corporation employer, and the individual proprietors, partners, and employees of individuals and firms, the business of which is controlled by the insured employer through stock ownership, contract, or otherwise. The term “employer”, as used in part 1 of this article and this part 2, may include an emergency service provider, any municipal or governmental corporation, unit, agency, or department thereof, and the proper officers, as such, of an emergency service provider or an unincorporated municipality or department thereof, as well as private individuals, partnerships, and corporations.    Under a policy issued to an association, including a labor union, which has a constitution and bylaws and which is organized and maintained in good faith for purposes other than that of obtaining insurance, insuring at least twenty-five members of the association for the benefit of persons other than the association or its officers or trustees, as such;    On and after July 1, 1994, under a policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state to insure any class of individuals that could be insured under such group life insurance policy; except that, on and after July 1, 1994, a group sickness and accident insurance policy must cover at least two or more individuals at date of issue;    Under a policy issued to any other substantially similar group which, in the discretion of the commissioner, may be subject to the issuance of a group sickness and accident policy or contract.    Repealed.         The provisions of this section shall not apply to transactions in this state involving group sickness and accident insurance policies for policies which were lawfully issued and delivered in another jurisdiction in which the company was authorized to do insurance business and any such policy was issued to a valid multistate association located in the state of issue, if the policy is not designed, administered, or marketed as a plan for employers to provide coverage to one or more employees and is not a bona fide association plan.    Repealed.         Except as required by section 10-16-140 or as provided for in subsection (2) of this section, all policies of group sickness and accident insurance providing coverage to persons residing in the state must contain in substance the following provisions or provisions that, in the opinion of the commissioner, are more favorable to the persons insured or at least as favorable to the persons insured and more favorable to the policyholder:   A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the policy shall continue in force, unless the policyholder has given the carrier written notice of discontinuance of the coverage in advance of the date of discontinuance in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the carrier for the payment of a pro rata premium for the time the coverage was in force during the grace period.    A provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue and that no statement made for the purpose of effecting insurance coverage under the policy with respect to a person shall be used to avoid the insurance with respect to which such statement was made or to reduce benefits under such policy after such insurance has been in force for a period of two years during such person's lifetime unless such statement is contained in a written instrument signed by the person making such statement and a copy of that instrument is or has been furnished to the person making the statement or to the beneficiary of any such person;    A provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued and that all statements made by the policyholder or by the persons covered shall be deemed representations and not warranties;    A provision that no agent has authority to change the policy or waive any of its provisions and that no change in the policy shall be valid unless approved by an officer of the insurer and evidenced by an endorsement on the policy or by rider or amendment to the policy signed by the insurer; but any such amendment which reduces or eliminates coverage shall have been either requested in writing or signed by the policyholder;    (A) A provision specifying the additional exclusions or limitations, if any, applicable under the policy with respect to a disease or physical condition of a person, not otherwise excluded from the person's coverage by name or specific description effective on the date of the person's loss, which existed prior to the effective date of the person's coverage under the policy. With respect to a group health coverage plan, such provision shall comply with the provisions of section 10-16-118; except that, with respect to a group disability income insurance policy, such provision shall comply with the provisions of sub-subparagraph (C) of this subparagraph (V).    A provision specifying the ages, if any, to which the insurance provided is limited, the ages, if any, for which additional restrictions are placed on benefits, and the additional restrictions placed on the benefits at such ages. If the premiums or benefits vary by age, there shall also be a provision specifying an equitable adjustment of premiums or benefits, or both, to be made in the event the age of a covered person has been misstated, such provision to contain a clear statement of the method of adjustment to be used. In no event, however, shall coverage be required for any person during any period when, according to the person's correct age, coverage would otherwise not be provided for the person under the policy.    A provision that the insurer will issue to the policyholder, for delivery to each person insured, a certificate, which may be in summary form, setting forth the essential features of the insurance coverage, including any applicable conversion or continuation privilege, and to whom the benefits are payable. If family members or dependents are included in the coverage, only one certificate need be issued for each family unit.    A provision that written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy. Failure to give notice within such time shall not invalidate nor reduce any claim if it is shown not to have been reasonably possible to give such notice and that notice was given as soon as was reasonably possible.    A provision that the insurer will furnish, to the person making claim or to the policyholder for delivery to said person, such forms as are usually furnished by it for filing proof of loss. If such forms are not furnished before the expiration of fifteen days after the insurer receives notice of any claim under the policy, the person making the claim shall be deemed to have complied with the requirements of the policy as to proof of loss upon submitting, within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made.    A provision that, in the case of claim for loss of time for disability, written proof of such loss must be furnished to the insurer within ninety days after the commencement of the period for which the insurer is liable, that subsequent written proofs of the continuance of such disability must be furnished to the insurer at such intervals as the insurer may reasonably require, and that, in the case of a claim for any other loss, written proof of such loss must be furnished to the insurer within ninety days after the date of such loss. Failure to furnish such proof within such time shall not invalidate nor reduce any claim if it was not reasonably possible to furnish such proof within such time if such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity of the claimant, later than one year from the time proof is otherwise required.    A provision that all benefits payable under the policy, other than benefits for loss of time, will be payable pursuant to section 10-16-106.5 and that, subject to due proof of loss, all accrued benefits payable under the policy for loss of time will be paid not less frequently than monthly during the continuance of the period for which the insurer is liable and that any balance remaining unpaid at the termination of such period will be paid as soon as possible after receipt of such proof;    A provision that indemnity for loss of life shall be payable to the beneficiary designated by the insured (but, when the policy contains conditions pertaining to family status or provisions pertaining to coverage of family members, the beneficiary may be the family member specified by the policy terms) or, if there is no such designated or specified beneficiary, to such other person as is specified in the policy and that all other indemnities of the policy are payable to the insured; except that the group policy may provide that all or any portion of any benefits on account of hospital, medical, and surgical or other services may be paid, at the insurer's option, directly to the hospital or person rendering such services. The group policy may provide that, if any benefit is payable to the estate of a person or to a person who is a minor or otherwise not competent to give a valid release, the insurer may pay such benefit, up to an amount not exceeding two thousand dollars, to any relative by blood or connection by marriage of such person who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to the provisions of this subparagraph (XII) shall discharge the insurer's obligation with respect to the extent of such payment.    A provision that the insurer shall have the right and opportunity to examine the person of the individual for whom claim is made when and so often as it may reasonably require during the pendency of claim under the policy and also the right and opportunity to make an autopsy in case of death where it is not prohibited by law;    A provision that no action at law or in equity shall be brought to recover on the policy prior to the expiration of the time requirements for payment pursuant to section 10-16-106.5 and after proof of loss has been filed in accordance with the requirements of the policy and that no such action shall be brought at all unless brought within three years from the expiration of the time within which proof of loss is required by the policy.         The provisions of subparagraph (V) of paragraph (a) of this subsection (3) shall not apply to dental insurance. (b) (I) The provisions of subparagraph (V) of paragraph (a) of this subsection (3) shall not apply to dental insurance.    The provisions of subparagraphs (V) and (XII) of paragraph (a) of this subsection (3) shall not apply to policies issued to a creditor to insure debtors of such creditor.    The standard provisions required for individual health insurance policies shall not apply to group health insurance policies.    If any provision of this section is, in whole or in part, inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the commissioner, shall omit from such policy any inapplicable provision or part thereof and shall modify any inconsistent provision or part thereof in such manner as to make the provision contained in the policy consistent with the coverage provided by the policy.          A carrier offering a group health benefit plan shall not establish rules for eligibility for any individual to enroll under the plan based on any health status-related factors in relation to the individual or a dependent of the individual.    A carrier writing health benefit coverage for an employee leasing company shall ensure that any health benefit plan marketed or sold to such company that covers employees in Colorado complies with all the provisions of Colorado law that apply to large employer health plans, including consumer and provider protections, mandated benefits, nondiscrimination and fair marketing rules, preexisting limitations, and other required health plan policy provisions. All health coverage plans sponsored by or marketed through an employee leasing company shall be fully insured plans.    A group sickness and accident insurance policy, other than a long-term care policy, disability income policy, or supplemental policy covering a specified disease or other limited benefit, issued, renewed, or reinstated on or after January 1, 2007, shall not contain any provision that limits or excludes payments under hospital or medical benefits coverage to or on behalf of the insured because the insured or any covered dependent sustained an injury while intoxicated or under the influence of a controlled substance, as defined in section 18-18-102 (5), C.R.S.     History. Source: L. 92: Entire article R&RE, p. 1673, § 1, effective July 1; (1)(e) repealed, p. 1592, § 114, effective July 1. L. 94: (1)(c) and (3)(a)(V) amended, p. 1919, § 12, effective July 1. L. 95: (3)(a)(V)(B) amended and (3)(a)(V)(C) added, p. 726, § 3, effective May 23. L. 97: (2)(a) and (3)(a)(V)(A) amended and (4) added, p. 643, § 9, effective July 1. L. 99: (5) added, p. 149, § 3, effective March 25. L. 2004: (3)(a)(XI), (3)(a)(XIV), and (5) amended, p. 991, § 12, effective August 4. L. 2006: (6) added, p. 408, § 2, effective January 1, 2007. L. 2008: (1)(a) amended, p. 579, § 2, effective August 5. L. 2010: (1)(c) amended,(HB 10-1203), ch. 47, p. 177, § 2, effective March 29. L. 2013: (1)(c), IP(3)(a), and (3)(a)(I) amended and (2)(b) repealed,(HB 13-1266), ch. 217, pp. 979, 978, § § 30, 27, effective May 13.    Editor's note:      The provisions of this section are similar to several former provisions of § 10-8-116 as they existed prior to 1992. For a detailed comparison, see the comparative tables located in the back of the index. (1) (a) The provisions of this section are similar to several former provisions of § 10-8-116 as they existed prior to 1992. For a detailed comparison, see the comparative tables located in the back of the index.    Subsection (2)(b) was relocated to § 10-16-102 (68) in 2013.        Cross references:   For the legislative declaration contained in the 1997 act amending subsections (2)(a) and (3)(a)(V)(A) and enacting subsection (4), see section 1 of chapter 154, Session Laws of Colorado 1997.   ANNOTATION   Law reviews. For article, “The Terminated Employee's Right to Continue Group Health Insurance”, see 17 Colo. Law. 53 (1988).   Annotator's note. Since § 10-16-214 is similar to § 10-8-116 as it existed prior to the 1992 repeal of part 1 of article 8 of this title, relevant cases construing that provision have been included in the annotations to this section.   This section requires the inclusion of the mandatory provisions as part of the terms of the contract of insurance, and makes them enforceable as such. Statements made by the policyholder can be used against it only if its application is attached to the policy. Fallis v. Zurich Ins. Co., 28 Colo. App. 235, 472 P.2d 174 (1970).   Individual employees' applications need not be attached to policy. The general assembly did not intend, by use of the wording of these statutes, that all applications made by individual employees or members of a group be attached to the original policy issued to the group. Fallis v. Zurich Ins. Co., 28 Colo. App. 235, 472 P.2d 174 (1970).   As a condition precedent to use of their statements as defense to liability. Subsection (2) does not require the mandatory inclusion in the policy of a provision that the application of an individual member must be attached to the policy, or to the certificate issued thereunder, as a condition precedent to the use of statements in that application as a defense to liability, although subsection (2)(b) indicates that any such statements are admissible in evidence whenever contained in a written application submitted to the insurer. Fallis v. Zurich Ins. Co., 28 Colo. App. 235, 472 P.2d 174 (1970).   Preemption of insurance provisions under the federal “Employee Retirement Income Security Act”. ERISA does not preempt persons from state laws which regulate insurance, banking, and securities. The test for whether a state law falls under the “business of insurance” is: (1) Whether the state law has the effect of transferring or spreading a policy holder's risk; (2) whether the state law is an integral part of the policy relationship between the insurer and the insured; and (3) whether the state law is limited to entities within the insurance industry. Denette v. Life of Indiana Ins. Co., 693 F. Supp. 959 (D. Colo. 1988 ).   This section meets all three requirements of the test and therefore regulates insurance and is not preempted by ERISA. Denette v. Life of Indiana Ins. Co., 693 F. Supp. 959 (D. Colo. 1988 ).