State RegulationsCO specificDifficulty 3/5
A Colorado small employer applies for group coverage, but too few of its eligible employees enroll, leaving the group below the carrier's minimum participation requirement. What may the carrier do under Colorado law?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Colorado's guaranteed-issue rule for small employers applies to employers that satisfy the participation and contribution requirements (C.R.S. § 10-16-105(3); C.R.S. § 10-16-102(61); Reg. 4-6-8). A group that falls below the minimum participation standard has not met the condition, so the carrier is not compelled to issue the coverage.
Why the other options are wrong
- A) Issuance is compelled only when the participation and contribution conditions are met; a shortfall removes the compulsion.
- C) The carrier's remedy is declination, not a penalty premium; double-rating is not the statutory mechanism.
- D) The Division of Insurance does not reassign groups; the employer must cure the shortfall or find a willing carrier.
Memory hook
Guaranteed issue is guaranteed only if the group shows up — participation first.