There is a new House Bill now pending in the Colorado legislature that could impact local businesses and clients. If passed, House Bill 1297 would increase existing taxes imposed on all fully insured health insurance premiums by up to 1%, starting in 2026.
Specifically, HB-1297 seeks to increase the Health Insurance Affordability Fee(tax) from the existing rate of 2.1% to 3.1%, on top of Colorado’s baseline 2% premium tax. Should this legislation pass, CO’s total effective tax burden on fully insured premium will increase to 5.1%.
Colorado already has one of the highest FI commercial tax rates in the country, and this additional 1% increase would likely be passed on to any Fully Insured businesses. The revenue from this new tax increase will be used to increase funding for the entity that administers CO’s state reinsurance program and the Omni Salud program.
If you or any of your clients believe this new bill may have a negative impact, the Denver Metro Chamber of Commerce has provided a link to voice concerns about the bill’s implications, which is available here: DMCC Live Action Link