State RegulationsCO specificDifficulty 3/5
A Colorado small-group carrier proposes a higher renewal rate for a Boulder employer specifically because the group's claims experience was high during the prior year. Under Colorado small-employer rating law, is this permitted?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Colorado small-employer rating under C.R.S. § 10-16-105.6 limits the factors a carrier may use to develop small-group rates. Rating a group up or down because of its claims experience or health status is not a permitted factor, so an experience-driven renewal increase violates the rating framework even if the employer is notified or consents.
Why the other options are wrong
- B) Notice does not cure an impermissible rating basis; the problem is the factor used, not the timing of the notice.
- C) Employer consent cannot transform a prohibited experience-based factor into a lawful one.
- D) The increase is prohibited because claims experience is not a permitted rating factor, not because employer approval is missing.
Memory hook
Small-group rates ride on approved factors — never on the group's own claims.