State RegulationsCO specificDifficulty 1/5
A small employer in Aurora meets a carrier's participation and premium-contribution requirements and applies for small-group health coverage, and some group members have preexisting health conditions. May the carrier decline to offer the coverage because of the group's health status?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Colorado's guaranteed-issue framework for small-employer coverage (C.R.S. § 10-16-105 and § 10-16-105.7, implemented through Reg. 4-2-43) requires carriers to offer coverage to eligible small employers that satisfy participation and contribution requirements, without regard to the health status of group members. A health-based declination defeats the guarantee the statute creates.
Why the other options are wrong
- B) A health-based declination is precisely what guaranteed issue prohibits once the employer meets the requirements.
- C) There is no threshold based on how many members have preexisting conditions; the protection applies once the requirements are met.
- D) Guaranteed issue does not permit health-based surcharging to circumvent the offer requirement; rates are governed by the rating-factor rules.
Memory hook
Small group meets the tests, coverage must be issued — health cannot veto it.