How Do You Compare Two Group Health Proposals in Colorado

Two Colorado group health proposals are comparable for a reason that has nothing to do with either issuer: federal regulation already forced both of them to describe their plans in the same document, in the same format, against the same modeled scenarios. Start there, then spend your own time on what that document points at and does not settle.

The document that makes two proposals comparable, and the deadline for getting it

The Summary of Benefits and Coverage is not marketing material an issuer chooses to produce. It is required, and its contents are fixed by regulation at 45 C.F.R. § 147.200:

“A group health plan (and its administrator as defined in section 3(16)(A) of ERISA)), and a health insurance issuer offering group or individual health insurance coverage, is required to provide a written summary of benefits and coverage (SBC) for each benefit package without charge to entities and individuals described in this paragraph (a)(1) in accordance with the rules of this section.” — 45 C.F.R. § 147.200(a)(1)

The part a Colorado employer can act on immediately is the request rule:

“Upon request. If a group health plan (or its sponsor) requests an SBC or summary information about a health insurance product from a health insurance issuer offering group health insurance coverage, an SBC must be provided as soon as practicable, but in no event later than seven business days following receipt of the request.” — 45 C.F.R. § 147.200(a)(1)(i)(D)

You do not have to apply for coverage to get the comparison document. You can ask for it, and the clock is written into the regulation. Where renewal is automatic, 45 C.F.R. § 147.200(a)(1)(i)(C)(2) requires the SBC to be provided “no later than 30 days prior to the first day of the new plan or policy year” — which is the deadline that matters most when you are weighing an incumbent against a challenger.

The scenarios both issuers already modeled for you

The single most useful thing in the document is the part employers skip. Under 45 C.F.R. § 147.200(a)(2)(ii) the SBC must include examples “that illustrate benefits provided under the plan or coverage for common benefits scenarios (including pregnancy and serious or chronic medical conditions)”, and a benefits scenario is “a hypothetical situation, consisting of a sample treatment plan for a specified medical condition during a specific period of time, based on recognized clinical practice guidelines”.

Both issuers ran the same hypothetical patient through their own plan design. That is the only genuinely like-for-like comparison an employer gets without a claims analyst, and it is already sitting in both documents. Read the coverage examples before you read anything else on the page.

What the summary hands you, and where it stops

The contents are prescribed, which means the two documents in front of you carry the same headings in the same order. The ones that decide a Colorado small group decision are these:

“(A) Uniform definitions of standard insurance terms and medical terms so that consumers may compare health coverage and understand the terms of (or exceptions to) their coverage…” “(C) The exceptions, reductions, and limitations of the coverage;” “(D) The cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations;” “(E) The renewability and continuation of coverage provisions;” “(F) Coverage examples…” “(K) For plans and issuers that maintain one or more networks of providers, an Internet address (or similar contact information) for obtaining a list of network providers;” “(L) For plans and issuers that use a formulary in providing prescription drug coverage, an Internet address (or similar contact information) for obtaining information on prescription drug coverage;” — 45 C.F.R. § 147.200(a)(2)(i)

The form is constrained too. Under 45 C.F.R. § 147.200(a)(3)(i) the SBC “must be presented in a uniform format, use terminology understandable by the average plan enrollee… not exceed four double-sided pages in length, and not include print smaller than 12-point font.” A document that short cannot carry everything, and item (K) is where it says so out loud: it hands you an address for the provider list and stops.

The network question a premium line never shows

Network type is the axis the summary points at and leaves to you. The federal glossary definitions are the ones to work from:

• HMO — “A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage.” (Health Maintenance Organization (HMO))
• PPO — “A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.” (Preferred Provider Organization (PPO))
• EPO — “A managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).” (Exclusive Provider Organization (EPO) Plan)
• POS — “A type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans also require you to get a referral from your primary care doctor in order to see a specialist.” (Point of Service (POS) Plans)

The clause inside the HMO definition is the one that bites hardest for a Colorado employer and is easiest to miss: an HMO “may require you to live or work in its service area to be eligible for coverage.” A Colorado business with people in more than one part of the state, or with an employee who moved and kept the job, feels that in a way the premium line never shows. Take the provider-list addresses from item (K) of both summaries and check them against your actual roster before you weigh anything else.

The plan design Colorado holds constant across both proposals

Colorado gives its small employers a like-for-like point of comparison most states do not have. C.R.S. § 10-16-1305(1)(b) requires a carrier offering a small group health benefit plan in Colorado to offer the standardized plan in the small group market in each county where it offers small group coverage, and to offer it throughout the entire county. The Division of Insurance says the same thing in plain words on its Colorado Option page: “Health insurance companies selling small group coverage must offer a Colorado Option plan to small employers.” The same page records the route as well: “Colorado Option small group plans can be purchased through a broker.”

The comparison value is structural. Whatever else two Colorado proposals contain, each has to contain an offer of the same state-designed standardized plan — so comparing those two offers compares the issuers with the plan design held constant. Everything else in a proposal is the issuer’s design; that one is Colorado’s, and it is the closest thing to a control in the whole exercise.

What is not a difference between two Colorado proposals

A surprising amount of what employers expect to compare is settled by statute and is identical on both documents.

Colorado does not leave the pricing basis open. The statute fixes the case characteristics a small employer premium may vary by, and the same list binds both proposals — so the difference between them is not a difference in what each is allowed to charge you for. The detail of that list sits on our Colorado page rather than here.

Acceptance is not a differentiator either. Under C.R.S. § 10-16-105(1)(b)(I), each carrier offering a small employer health benefit plan in Colorado must issue to any eligible small employer that applies and agrees to make the required premium payments, so “will they take us” is not a question either proposal answers better than the other. Nor is timing: C.R.S. § 10-16-105.7(2)(a) requires a carrier to permit an employer to purchase a group health benefit plan at any point during the year, subject to C.R.S. § 10-16-105.7(2)(b), which lets a carrier decline a group that cannot meet a material contribution or participation provision and confine it to an annual enrollment window. If both proposals come with participation terms, that subsection — not the effective date you would prefer — is what governs your timing.

Funding shape decides which rules a proposal is under

The axis that most often makes two documents genuinely incomparable is the one neither document leads with. Fully-insured small group coverage, a level-funded arrangement and a self-funded plan with stop-loss are different products under different rule sets, and both can be handed to you as “a small group proposal.” The Departments of the Treasury, Labor and Health and Human Services described the risk this way in a proposed rule:

“Interested parties have expressed that small employers that switch from fully-insured coverage to level-funded arrangements may be unaware that the self-funded plans they are offering to their employees may not include certain benefits that would have to be covered if the plan were fully-insured.”

That is a description of how the arrangement works rather than a rule — the final version of that rulemaking declined to address level-funded arrangements at all. It is still the right question to put to both proposals before you compare a single line of either: which shape is this, and which set of requirements does it sit under? Ask it first, because a difference in benefits between a fully-insured group health plan and a self-funded arrangement is not a difference in generosity; it is a difference in which rules apply.

What to have in front of you before you compare

Ask each issuer for the Summary of Benefits and Coverage for every benefit package you are being offered, including the standardized Colorado plan. Put the coverage examples side by side first. Pull both provider lists from the addresses in item (K) and test them against your real roster, not against a hypothetical one. Establish the funding shape of each proposal in writing. Then, and only then, look at what each one costs — by which point you will know whether the number you are comparing is describing the same thing on both pages. If this is a renewal rather than a first purchase, our renewal shopping service runs exactly this sequence, and a quote request is enough to start it.