The Colorado Option is not a plan the state sells. It is a standardized health benefit plan the commissioner establishes by rule, which carriers then offer alongside their own — C.R.S. § 10-16-1304(1). It rides on Colorado’s ordinary small group definition rather than carrying eligibility rules of its own. What it fits follows from how it is built.
The name on the marketing and the name in the statute are different
Start with the vocabulary: the names lead to different documents. The statutory name is set out in the part’s first section:
The short title of this part 13 is the “Colorado Standardized Health Benefit Plan Act”.
That is C.R.S. § 10-16-1301. The Act’s word for the product is not option but standardized plan, defined by pointing at the rule that creates it — C.R.S. § 10-16-1303(14): “Standardized plan” means the standardized health benefit plan designed by rule of the commissioner pursuant to section 10-16-1304.
“Colorado Option” is the name the Division of Insurance uses on its pages, and the name on a proposal. Both are correct for what they are, but the marketing name is not the statute’s — so when something turns on the exact rule, follow the section number.
Why the legislature built it, in its own words
Title 10, article 16, part 13 opens with a legislative declaration — the General Assembly saying what it is trying to do. C.R.S. § 10-16-1302(1)(f) states the design in a line:
In order to ensure that health insurance is affordable for Coloradans, it is critical that the state establish a standardized plan for carriers to offer in the state and set premium reduction targets for carriers to achieve.
Read that as what it is — a statement of purpose, not a report of results. It gives the architecture: a plan the state standardizes, and targets carriers are asked to hit. The rest of Title 10, article 16, part 13 is machinery hung on those.
What the commissioner is required to put in the design
The design mandate is the spine of the Act, and the verb is worth reading before the list. C.R.S. § 10-16-1304(1):
On or before January 1, 2022, the commissioner shall establish, by rule, a standardized health benefit plan to be offered by carriers in this state in the individual and small group markets. The standardized plan must:
The commissioner establishes the plan; the carriers offer what the commissioner established. That inversion is why this product behaves differently from everything else an employer will be shown, and it is the most useful sentence in Title 10, article 16, part 13.
The components follow immediately. Under C.R.S. § 10-16-1304(1)(a) through (c) the plan must Offer health-care coverage at the bronze, silver, and gold levels of coverage as described in section 10-16-103.4
, Include, at a minimum, pediatric and other essential health benefits
, and Be offered through the exchange and in the individual market through the public benefit corporation
. Under C.R.S. § 10-16-1304(1)(e) and (f) it must also be actuarially sound and comply with the federal act and with Title 10, article 16.
The metal labels do less work than most buyers assume: federal regulation ties them to actuarial value — the share of expected covered costs a design is built to carry — not to network breadth or service quality, at 45 CFR 156.140.
First-dollar and predeductible — the phrase that carries the whole benefit design
The most reader-relevant thing about the plan is where the statute puts its coverage. C.R.S. § 10-16-1304(1)(d) requires it to Be a standardized benefit design that: … (II) Has a defined benefit design and cost-sharing that improves access and affordability; and (III) Is designed to improve racial health equity and decrease racial health disparities … including: (A) Improving perinatal health-care coverage; and (B) Providing first-dollar, predeductible coverage for certain high-value services, such as primary and behavioral health care.
First-dollar, predeductible is the legislature’s own phrase, at C.R.S. § 10-16-1304(1)(d)(III)(B), and it is the sentence to keep: a plan whose coverage begins before the deductible does, for a named class of services. Which services the Division has picked, and what a member pays for them, are questions for the plan document. The statutory commitment is that the design must put something at the front end rather than behind the deductible.
The network floor, and the market line hiding inside it
This is the part most summaries get slightly wrong, including one written for this site’s own state record — C.R.S. § 10-16-1304(1)(g):
(g) Have a network that is: (I) Culturally responsive and, to the greatest extent possible, reflects the diversity of its enrollees … and (II) No more narrow than the most restrictive network the carrier is offering for nonstandardized plans in the individual market for the metal tier for that rating area.
Note the phrase buried in the second limb: in the individual market. The floor is not set by the carrier’s other small group networks. It is set by that carrier’s own nonstandardized networks in the individual market, for the matching metal tier and rating area — and those are separate markets in federal law, defined at 45 CFR 144.103. A summary that drops it invites an employer to expect a floor the statute does not promise, and it means a network question is still live on a Colorado Option proposal rather than one standardization has settled.
The Act does not leave networks to assertion. Under C.R.S. § 10-16-1304(2)(a) a carrier must describe in its network access plan the efforts it made to build a diverse, culturally responsive network, and must include a majority of the essential community providers in its service area; under C.R.S. § 10-16-1304(2)(b) a carrier that cannot meet the requirement files an action plan with the Division. The statute anticipates failure and routes it.
Comparability is a statutory requirement, and the design is allowed to move
A further requirement in the same section matters to a buyer — C.R.S. § 10-16-1304(3)(a): The standardized plan must be offered in a manner that allows consumers to easily compare the standardized plans offered by each carrier.
Subsection (3)(b) puts the display format on the exchange. Easy comparison is not a claim somebody makes about these plans; it is a thing the statute requires of them.
C.R.S. § 10-16-1304(4) then lets the commissioner update the standardized plan annually by rule. The design is a moving object by statute, which is why no description of it should be tied to one year’s specifics. The designs themselves live in Colorado Insurance Regulation 4-2-81, which the Division names as the place to look on its Colorado Option page.
What happens when a carrier says it cannot — the part nobody describes
Colorado did not just design a plan and ask carriers to sell it. It wrote a public process for what happens when a carrier says it cannot meet the plan’s premium requirements, and that process runs to the provider contract — C.R.S. § 10-16-1306.
The sequence: a carrier that cannot offer the standardized plan at the required rate must notify the commissioner of the reasons and the steps it will take, with documentation about the hospital or provider it says is the cause. The Division may hold a public hearing before approving that carrier’s final rates, with the office of the insurance ombudsman representing consumers. On the evidence, the commissioner may set the reimbursement rates hospitals and providers receive under the standardized plan and may require them to accept those rates — subject to floors and caps the section specifies, which are prices and are not reproduced here, and limited by C.R.S. § 10-16-1306(11) to the hospitals or providers that actually caused the failure. A carrier or provider may appeal to the Colorado court of appeals. The process is also firewalled from the rest of a carrier’s book, by C.R.S. § 10-16-1306(12):
The commissioner shall not use the failure of a carrier to meet the premium rate requirements for the standardized plan in a county as a reason to deny premium rates for a nonstandardized plan of a carrier in that county.
One provision there is worth an employee’s attention. C.R.S. § 10-16-1306(10): A hospital or a health-care provider in Colorado shall not balance bill consumers enrolled in the standardized plan for services covered by the standardized plan and shall accept the reimbursement rates established by the commissioner pursuant to subsection (4) of this section, if applicable, for the service provided to the consumer.
Read the scope before repeating it: the protection runs to people enrolled in a standardized plan, for services that plan covers. It is not a general Colorado balance-billing rule.
The federal half, and why the statute made itself conditional
Colorado wrote the premium rate requirement and then wrote a condition on it. C.R.S. § 10-16-1308(2)(b):
The implementation and operation of section 10-16-1305 (2) is contingent on the approval of the 1332 waiver application and the receipt of federal funds.
The approval half is on the federal record. CMS publishes the Colorado entry on its Section 1332 State Innovation Waivers page, recording that the Departments approved Colorado’s waiver amendment request and that the approval is effective for January 1, 2023 through December 31, 2027. The letter itself, dated June 23, 2022 and published as Colorado Option 1332 state innovation waiver amendment, describes the program the federal government thought it was approving: The amendment will allow the full implementation of the Colorado Option, which is an innovative model for health insurance that promotes competition and health equity by combining several key components: standardized benefit plans; required premium reduction targets; regulatory and programmatic mechanisms as a backstop to ensure providers, hospitals, and issuers meet those targets; and affordability improvements for eligible Exchange enrollees and those not currently eligible for federal subsidies under the ACA.
Standardized design, targets, backstop — the federal government describing, in a single sentence, the same architecture the sections above set out.
So who does it actually fit
Eligibility is where most readers start, and it is the wrong place to look. The Colorado Option has no eligibility rule of its own: whether your business is a small employer under Colorado law is the same question, with the same answer, as for any other Colorado small group plan, and it is answered in full in how many employees you need for a group plan in Colorado. Carriers that offer small group coverage in Colorado are required to offer the standardized plan — C.R.S. § 10-16-1305(1)(b), set out with the Division’s own corroboration in setting up a first group health plan in Colorado. Practically, most Colorado small employers shopping that market will be shown one whether they asked for it or not, so the real question is what it is for.
Several answers come out of the statute without a figure. It fits an employer who wants the benefit design held constant while proposals vary: under C.R.S. § 10-16-1304(1) and (3)(a) the design is fixed by rule and built for comparison, so what differs between competing proposals carrying it is the carrier, the network and the rate, not the plan. It fits an employer whose people actually use primary and behavioral health care, because C.R.S. § 10-16-1304(1)(d)(III)(B) points the plan’s coverage at those services before the deductible. And it fits an employer in a thin rural market better than one might expect, because C.R.S. § 10-16-1306(4)(e) lets the commissioner, after a hearing, Require the carrier to offer the standardized plan in specific counties where no carrier is offering the standardized plan in that plan year in either the individual or small group market.
That is a power the commissioner may exercise, not a promise about your county.
One more provision shapes how it reaches you. C.R.S. § 10-16-1305(4): The commissions paid to insurance producers for the sale of the standardized plan must be comparable to the average commissions paid for the sale of other plans offered in the individual and small group markets.
The Division states on its Colorado Option page that it reviews producer commissions in its annual rate review. The effect is to remove a compensation reason to steer you away from the standardized plan — a different guarantee from your entitlement to see a producer’s compensation schedule at all, covered in how you get a group health quote in Colorado.
How you know you are looking at one
The Division requires the product to identify itself. Its plan-year standardized plan document, 2026 Colorado Option Standard Plans, sets the convention:
These plans will have ‘Colorado Option’ in their name. Colorado Option plans will have the following naming conventions: ‘[Name of Insurance Company] Colorado Option [Metal Tier].’ Health insurance companies must also include these naming conventions in all consumer-facing material and advertisements.
The same document describes a dual logo, the Division’s Colorado Option mark shown alongside the company’s. So the standardized plan is the proposal line whose product name carries the company, the words Colorado Option, and the metal tier. Anything else is that carrier’s own design — which is the comparison the Act was built to make possible, and worth knowing before you read the rest of the Colorado group health picture.
The bottom line
The Colorado Option is the Colorado Standardized Health Benefit Plan Act’s standardized plan — a design the commissioner of insurance establishes by rule under C.R.S. § 10-16-1304(1), which carriers then offer alongside their own products. A few things about it are worth an employer’s attention. Its benefit design is fixed by rule rather than by the carrier, so what differs between competing proposals carrying it is not the plan. It is required to put coverage at the front end, including first-dollar, predeductible coverage for certain high-value services such as primary and behavioral health care. And Colorado wrote a public process, at C.R.S. § 10-16-1306, for what happens when a carrier says it cannot meet the plan’s premium requirements. It has no eligibility rule of its own: whether you are a small employer under Colorado law is the same question, with the same answer, as it is for any other Colorado small group plan.
Frequently asked questions
What is the Colorado Option?
It is a standardized health benefit plan. C.R.S. § 10-16-1303(14) defines the standardized plan as the plan designed by rule of the commissioner pursuant to section 10-16-1304, and § 10-16-1304(1) directs the commissioner to establish it by rule for the individual and small group markets at the bronze, silver and gold levels. Carriers offer it; the commissioner designs it. The statute’s own name for the program is the Colorado Standardized Health Benefit Plan Act, C.R.S. § 10-16-1301.
Is the Colorado Option a government-run health plan?
No. The commissioner of insurance sets the benefit design by rule under C.R.S. § 10-16-1304(1), and private carriers offer, underwrite and administer the plans. The statute requires the design to be actuarially sound and to let a carrier keep meeting the financial requirements in article 3 of title 10, which is the language of a regulated insurance product rather than a public program.
Who is eligible for a Colorado Option small group plan?
The Colorado Option does not carry an eligibility rule of its own. It is offered in the small group market, so the question of whether your business is a small employer is answered by Colorado’s general small employer definition in the insurance code — the same question, with the same answer, as for any other Colorado small group plan. That definition, and what it asks an employer to prove, is a separate subject with its own post.
Can an employee on a Colorado Option plan be balance billed?
C.R.S. § 10-16-1306(10) provides that a hospital or health-care provider in Colorado shall not balance bill consumers enrolled in the standardized plan for services covered by the standardized plan. Read the scope: it is written for people enrolled in a standardized plan and for services that plan covers. It is not a general Colorado balance-billing rule, and Colorado’s separate balance-billing law is a different subject.
Does a broker earn less for selling a Colorado Option plan?
The statute is written to prevent that. C.R.S. § 10-16-1305(4) requires that commissions paid to insurance producers for the sale of the standardized plan be comparable to the average commissions paid for the sale of other plans offered in the individual and small group markets. The Division of Insurance states on its Colorado Option page that it reviews producer commissions as part of its annual rate review.
About the author
Nate Jones, CPCU, is the founder of Wexford Insurance and Wexford Health Insurance, an independent agency placing small-business group benefits in 9 states. Nate reads the Colorado Standardized Health Benefit Plan Act as the statute it is — Title 10, article 16, part 13 runs well past the sections most summaries quote, and the sections nobody quotes are where an employer’s real questions get answered. Start with the Wexford Health Insurance quote form.