Senate Bill 24-073, recently enacted by the Colorado General Assembly, introduces important modifications to the definition of a “small employer.”
Key Changes Introduced by SB 24-073:
1. Redefinition of Small Employer: Effective January 1, 2026, the definition of a “small employer” will change from those employing between 1 and 100 employees to those employing between 1 and 50 employees. This means that businesses with 51 to 100 employees will no longer qualify as small employers under this new definition.
2. Transition Period: Employers who currently qualify as small employers but will exceed the new threshold of 50 employees can retain their small group plans for up to five years after the change takes effect. During this period, they may switch between small group plans offered by their carrier, but only within one metal level above or below their existing plan.
3. Actuarial Review: The Commissioner of Insurance will conduct an actuarial review to assess the impact of this change on premiums. If the review finds that premiums for the majority of individuals covered by small group plans would increase by more than 3%, the change to the definition of “small employer” will be repealed.
Implications for Your Business:
- Client Reclassification: You may need to reclassify some of your clients who currently fall within the 51-100 employee range. These clients will need to transition to large group health plans or take advantage of the five-year transition period.
- Plan Offerings: Guide your clients in selecting compliant plans and help them understand the differences between small and large group plans, including the impact on coverage and premiums.
- Communication: It will be crucial to communicate these changes effectively to your clients, ensuring they understand the timelines and their options.
We understand that legislative changes can be challenging, and here to support you through it. We’ll keep you informed with the latest updates, so we can work together to ensure the best outcome for your business. If you have any questions or need further assistance, please do not hesitate to reach out to FH Insurance.