Colorado § 10-16-1205 - Health insurance affordability fee - special assessment on hospitals - allocation of revenues.

§ 10-16-1205. Health insurance affordability fee - special assessment on hospitals - allocation of revenues.

(1) (a) (I) Starting in the 2021 calendar year, the enterprise shall assess and collect from carriers, by July 15 each year, a health insurance affordability fee. The fee amount is based on the following percentages of premiums collected by the following carriers in the immediately preceding calendar year on health benefit plans issued in the state:

(A) One and fifteen hundredths percent of premiums collected by nonprofit carriers; and

(B) Two and one-tenth percent of premiums collected by for-profit carriers.

(II) For the 2022 and 2023 calendar years, the enterprise shall assess and collect from hospitals a special assessment of twenty million dollars per year, subject to subsection (5) of this section. The enterprise shall not collect the special assessment for the 2022 calendar year before October 1, 2022.

(b) The enterprise shall use the fee, the special assessment on hospitals, and any other money available in the fund as follows, allocated in accordance with subsection (2) of this section:

(I) To provide funding for the reinsurance program;

(II) To provide payments to carriers to increase the affordability of health insurance on the individual market for Coloradans who receive the premium tax credit;

(III) To provide subsidies for state-subsidized individual health coverage plans purchased by qualified individuals;

(IV) To pay the actual administrative costs of the enterprise for implementing and administering this part 12, limited to three percent of the enterprise's revenues. Actual administrative costs include the following:

(A) The administrative costs of the enterprise, including the costs to implement and administer the programs established pursuant to this part 12;

(B) The enterprise's actual costs related to implementing and maintaining the fee and special assessment on hospitals, including personal services and operating expenses; and

(C) The costs for conducting analyses necessary to determine the payments to be made to carriers for the purposes described in subsection (1)(b)(II) of this section and the requirements for state-subsidized individual health coverage plans offered by carriers; and

(V) To pay the costs for consumer enrollment, outreach, and education activities regarding health-care coverage, including:

(A) Increasing grants to the exchange's certified assistance network;

(B) Marketing for the exchange;

(C) Grants to community-based organizations that are able to assist with outreach and enrollment, particularly in communities that face the greatest barriers to enrolling in health care coverage; and

(D) Improving the connection between unemployment services and enrollment in health care coverage.

(c) This subsection (1) does not apply to plans or benefits provided under medicaid, medicare, or the children's basic health plan.

(2) (a) The enterprise shall transmit the fees and special assessments collected pursuant to this section to the state treasurer for deposit in the health insurance affordability cash fund created in section 10-16-1206 and, except as provided in subsection (4) of this section, shall allocate the money in the fund in accordance with this subsection (2).

(b) The enterprise shall allocate the revenues collected in 2021, and any other money deposited in the fund in 2021, as follows:

(I) Up to three percent for actual administrative costs as set forth in subsection (1)(b)(IV) of this section;

(II) To the reinsurance program cash fund, an amount necessary to fund the payment parameters of the reinsurance program, as determined pursuant to section 10-16-1105 (2), not to exceed ninety million dollars or, if the revenues collected pursuant to subsection (1)(a) of this section are less than ninety million dollars, the amount collected; and

(III) Of any remaining balance in the fund after deducting the allocations specified in subsections (2)(b)(I) and (2)(b)(II) of this section:

(A) Up to one percent of the total amount of revenues collected or deposited into the fund in 2021, but not more than one million five hundred thousand dollars, for implementation costs and consumer enrollment, outreach, and education activities regarding health care coverage as described in subsection (1)(b)(V) of this section; and

(B) The remaining balance to carriers to reduce the costs of individual health plans for individuals who purchase an individual health benefit plan on the exchange and receive the premium tax credit.

(c) The enterprise shall allocate the revenues collected in 2022, and any other money deposited in the fund in 2022, as follows:

(I) Up to three percent for actual administrative costs as set forth in subsection (1)(b)(IV) of this section;

(II) To the reinsurance program cash fund, eighty-eight million dollars; and

(III) Of the remaining balance in the fund after deducting the allocations specified in subsections (2)(c)(I) and (2)(c)(II) of this section:

(A) Thirty percent to carriers to reduce the costs of individual health plans for individuals who purchase an individual health benefit plan on the exchange and receive the premium tax credit; and

(B) Seventy percent for subsidies for state-subsidized individual health coverage plans purchased by qualified individuals.

(d) (I) Except as provided in subsections (2)(d)(IV) and (2)(e) of this section, the enterprise shall allocate the revenues collected in 2023 through 2026, and any other money deposited in the fund in 2023 through 2026, in the following amounts and order of priority:

(A) First, up to three percent for actual administrative costs as set forth in subsection (1)(b)(IV) of this section;

(B) Second, eighteen million dollars for subsidies for state-subsidized individual health coverage plans purchased by qualified individuals;

(C) Third, the amount remaining in the fund, up to seventy-three percent of the total amount of revenues collected or deposited into the fund in the applicable year, but not to exceed ninety million dollars, to the reinsurance program cash fund; and

(D) Fourth, ten percent of the total amount of revenues collected or deposited into the fund in the applicable year or the amount remaining in the fund, whichever is less, to carriers to reduce the costs of individual health plans for individuals who purchase an individual health benefit plan on the exchange and receive the premium tax credit.

(II) If, after making the allocations specified in subsection (2)(d)(I) of this section, there is money remaining in the fund in the applicable year, the enterprise shall allocate the remaining money for subsidies for state-subsidized individual health coverage plans purchased by qualified individuals.

(III) Notwithstanding subsections (2)(d)(I) and (2)(d)(II) of this section, if the approval of the demonstration waiver received pursuant to section 25.5-4-503 (2) sets conditions on the use of the money received, the enterprise shall allocate the money received pursuant to section 25.5-4-503 (2) as set forth in the approval. If the approval does not set conditions on the use of money received, the enterprise shall allocate the money in the manner set forth in subsections (2)(d)(I) and (2)(d)(II) of this section.

(IV) On or after August 28, 2025, the enterprise shall reallocate any amount of revenues collected and allocated pursuant to subsection (2)(d)(I) of this section that has not been expended on or before August 28, 2025, not to exceed twenty million dollars, for any other purpose specified in subsection (2)(d)(I) of this section except administrative costs described in subsection (2)(d)(I)(A) of this section.

(e) (I) On or after the date on which the state treasurer credits money to the fund in accordance with section 10-16-1206 (1.5)(a), except as provided in subsection (2)(e)(II) of this section, the enterprise shall allocate the money credited to the fund pursuant to section 10-16-1206 (1.5)(a) as follows:

(A) Up to fifty million dollars to the reinsurance program cash fund; and

(B) Up to fifty million dollars to carriers to reduce the costs of individual health plans for individuals who purchase an individual health benefit plan on the exchange and receive the premium tax credit.

(II) The enterprise may allocate up to five million dollars of the money credited to the fund in accordance with section 10-16-1206 (1.5)(a) for any other purpose specified in subsection (2)(d)(I) of this section except administrative costs described in subsection (2)(d)(I)(A) of this section.

(III) Repealed.

(f) (I) The enterprise shall allocate at least the following revenues assessed for the 2027 calendar year and for each calendar year thereafter, the proceeds from the issuance of revenue bonds pursuant to section 10-16-1213, the money transferred to the fund pursuant to section 10-16-1206 (6), and any other money deposited in the fund for allocation in the 2027 calendar year and in each calendar year thereafter as follows:

(A) First, at least twenty percent for subsidies for state-subsidized individual health coverage plans purchased by qualified individuals who pay a premium for such plans, as specified in rules adopted pursuant to section 10-16-1215;

(B) Second, at least fifty percent to the reinsurance program cash fund;

(C) Third, at least twenty-five percent to reduce the costs of individual health benefit plans for individuals who purchase an individual health benefit plan on the exchange;

(D) Fourth, up to three percent for actual administrative costs as set forth in subsection (1)(b)(IV) of this section; and

(E) Fifth, the actual costs of ensuring compliance with the federal Hyde amendment or a similar amendment.

(II) The enterprise shall allocate any amount of revenues remaining after allocating revenues pursuant to subsection (2)(f)(I) of this section and after any reduction in the amount of bonds issued pursuant to section 10-16-1213 (1)(a) related to the adjustment in the statewide average premium reduction in the reinsurance program to meet the following objectives:

(A) To attain a statewide average premium reduction in the reinsurance program of eighteen percent, provide premium assistance for individuals who purchase insurance on the exchange at the same level of premium assistance provided in the 2026 calendar year, and provide coverage for qualified individuals at the enrollment level achieved in the 2026 calendar year; and

(B) To support additional affordability efforts to maintain or increase coverage in the individual market.

(III) In any calendar year, after making the allocations specified in subsections (2)(f)(I) and (2)(f)(II) of this section, if there is money remaining in the fund on August 1 of that calendar year, the enterprise may reallocate any amount of the revenues collected and allocated pursuant to subsection (2)(f)(I) or (2)(f)(II) of this section that have not been expended on or before August 1 of that calendar year for any other purpose specified in subsection (2)(f)(I) or (2)(f)(II) of this section except the administrative costs described in subsection (2)(f)(I)(D) of this section.

(3) The enterprise shall distribute the allocations specified in subsection (2) of this section in accordance with the requirements determined by the board pursuant to section 10-16-1207 (4).

(4) If the commissioner, pursuant to section 10-16-1107 (4), notifies the board that the reinsurance program will receive federal funding pursuant to a federal reinsurance program or other federal financial assistance for the reinsurance program that is in excess of federal pass-through funding received pursuant to section 10-16-1107 (1)(a)(I), the enterprise may eliminate or reduce the amount of enterprise revenues allocated to the reinsurance program pursuant to subsection (2) of this section based on the amount of federal funding the reinsurance program receives, as indicated in the commissioner's notice, and shall reallocate the portion of the enterprise revenues no longer allocated to the reinsurance program to the other purposes specified in subsection (2) of this section in accordance with that subsection (2).

(5) (a) The special assessments on hospitals under subsection (1)(a)(II) of this section must comply with and not violate 42 CFR 433.68. If the federal centers for medicare and medicaid services in the United States department of health and human services informs the state that the state will not be in compliance with 42 CFR 433.68 as a result of the special assessment on hospitals pursuant to subsection (1)(a)(II) of this section, the enterprise shall reduce the amount of the special assessment as necessary to avoid any reduction in the healthcare affordability and sustainability hospital provider fee collected pursuant to section 25.5-4-402.4.

(b) A hospital shall pay the special assessment imposed pursuant to subsection (1)(a)(II) of this section from its general revenues and is prohibited from:

(I) Collecting an assessment from consumers as any type of surcharge on its fees;

(II) Passing the special assessment on to consumers as any type of increase to fees or charges for services; or

(III) Otherwise passing the special assessment on to consumers in any manner.

Source: L. 2020: Entire part added, (SB 20-215), ch. 201, p. 990, § 1, effective June 30. L. 2022: (2)(d)(III) added, (HB 22-1289), ch. 399, p. 2835, § 2, effective June 7. L. 2025: (5)(a) amended, (SB 25-270), ch. 151, p. 604, § 11, effective May 1. L. 2025, 1st Ex. Sess.: IP(2)(d)(I) amended and (2)(d)(IV) and (2)(e) added, (HB 25B-1006), ch. 10, p. 41, § 2, effective August 28 (see editor's note). L. 2026: IP(2)(d)(I) amended, (2)(e)(III) repealed, and (2)(f) added, (SB 26-178), ch. 298, p. 1644, § 3, effective June 2.

Editor's note: (1) Section 10-16-1209 (1) provides that subsection (2)(e) is effective if, by December 31, 2025, the United States congress does not enact and the president does not sign federal legislation that extends, recreates, or otherwise reinstates the enhanced premium tax credit for the 2026 plan year. The commissioner of insurance notified the revisor of statutes in writing on June 8, 2026, that the condition specified occurred. As a result, subsection (2)(e) became effective January 1, 2026. For more information, see HB 25B-1006 (L. 2025, 1st Ex. Sess., p. 45).

(2) Subsection (2)(e) was added by HB 25B-1006, effective January 1, 2026. Subsection (2)(e)(III) was subsequently repealed by SB 26-178, effective June 2, 2026. For amendments to subsection (2)(e)(III) in effect from January 1, 2026, to June 2, 2026, see HB 25B-1006. (L. 2025, 1st Ex. Sess., p. 41.)

Cross references: For the legislative declaration in HB 22-1289, see section 1 of chapter 399, Session Laws of Colorado 2022.