(1) Group sickness and
accident insurance is declared to be that form of sickness and accident insurance
covering groups of persons, with or without their dependents, and issued upon the
following bases:
(a) Under a policy issued to an employer, who shall be deemed the
policyholder, insuring at least ten employees of such employer for the benefit of
persons other than the employer. The term employees, as used in part 1 of this
article and this part 2, includes the officers, managers, and employees of the
employer, the bona fide volunteers if the employer is an emergency service
provider, the partners if the employer is a partnership, the officers, managers, and
employees of subsidiary or affiliated corporations of a corporation employer, and
the individual proprietors, partners, and employees of individuals and firms, the
business of which is controlled by the insured employer through stock ownership,
contract, or otherwise. The term employer, as used in part 1 of this article and this
part 2, may include an emergency service provider, any municipal or governmental
corporation, unit, agency, or department thereof, and the proper officers, as such,
of an emergency service provider or an unincorporated municipality or department
thereof, as well as private individuals, partnerships, and corporations.
(b) Under a policy issued to an association, including a labor union, which has
a constitution and bylaws and which is organized and maintained in good faith for
purposes other than that of obtaining insurance, insuring at least twenty-five
members of the association for the benefit of persons other than the association or
its officers or trustees, as such;
(c) On and after July 1, 1994, under a policy issued to any person or
organization to which a policy of group life insurance may be issued or delivered in
this state to insure any class of individuals that could be insured under such group
life insurance policy; except that, on and after July 1, 1994, a group sickness and
accident insurance policy must cover at least two or more individuals at date of
issue;
(d) Under a policy issued to any other substantially similar group which, in
the discretion of the commissioner, may be subject to the issuance of a group
sickness and accident policy or contract.
(e) Repealed.
(2) (a) The provisions of this section shall not apply to transactions in this
state involving group sickness and accident insurance policies for policies which
were lawfully issued and delivered in another jurisdiction in which the company was
authorized to do insurance business and any such policy was issued to a valid
multistate association located in the state of issue, if the policy is not designed,
administered, or marketed as a plan for employers to provide coverage to one or
more employees and is not a bona fide association plan.
(b) Repealed.
(3) (a) Except as required by section 10-16-140 or as provided for in
subsection (2) of this section, all policies of group sickness and accident insurance
providing coverage to persons residing in the state must contain in substance the
following provisions or provisions that, in the opinion of the commissioner, are more
favorable to the persons insured or at least as favorable to the persons insured and
more favorable to the policyholder:
(I) A provision that the policyholder is entitled to a grace period of thirty-one
days for the payment of any premium due except the first, during which grace
period the policy shall continue in force, unless the policyholder has given the
carrier written notice of discontinuance of the coverage in advance of the date of
discontinuance in accordance with the terms of the policy. The policy may provide
that the policyholder is liable to the carrier for the payment of a pro rata premium
for the time the coverage was in force during the grace period.
(II) A provision that the validity of the policy shall not be contested, except
for nonpayment of premiums, after it has been in force for two years from its date
of issue and that no statement made for the purpose of effecting insurance
coverage under the policy with respect to a person shall be used to avoid the
insurance with respect to which such statement was made or to reduce benefits
under such policy after such insurance has been in force for a period of two years
during such person's lifetime unless such statement is contained in a written
instrument signed by the person making such statement and a copy of that
instrument is or has been furnished to the person making the statement or to the
beneficiary of any such person;
(III) A provision that a copy of the application, if any, of the policyholder shall
be attached to the policy when issued and that all statements made by the
policyholder or by the persons covered shall be deemed representations and not
warranties;
(IV) A provision that no agent has authority to change the policy or waive any
of its provisions and that no change in the policy shall be valid unless approved by
an officer of the insurer and evidenced by an endorsement on the policy or by rider
or amendment to the policy signed by the insurer; but any such amendment which
reduces or eliminates coverage shall have been either requested in writing or
signed by the policyholder;
(V) (A) A provision specifying the additional exclusions or limitations, if any,
applicable under the policy with respect to a disease or physical condition of a
person, not otherwise excluded from the person's coverage by name or specific
description effective on the date of the person's loss, which existed prior to the
effective date of the person's coverage under the policy. With respect to a group
health coverage plan, such provision shall comply with the provisions of section 10-16-118; except that, with respect to a group disability income insurance policy, such
provision shall comply with the provisions of sub-subparagraph (C) of this
subparagraph (V).
(B) In no event shall such exclusion or limitation apply to loss incurred or
disability commencing after the earlier of the end of a continuous period of six
months commencing on or after the effective date of the person's coverage during
all of which the person has received no medical advice or treatment in connection
with such disease or physical condition and the end of the six-month period
commencing on the effective date of the person's coverage, except as provided in
sub-subparagraphs (A) and (C) of this subparagraph (V).
(C) A group disability income insurance policy shall not define a preexisting
condition more restrictively than an injury, sickness, or pregnancy for which a
person incurred charges, received medical treatment, consulted a health
professional, or took prescription drugs within the twelve-month period
immediately preceding the effective date of coverage. In no event shall a group
disability income insurance policy deny, exclude, or limit benefits for a covered
individual because of a preexisting condition for a disability commencing more than
twelve months following the effective date of such individual's coverage under the
group disability income insurance policy.
(VI) A provision specifying the ages, if any, to which the insurance provided is
limited, the ages, if any, for which additional restrictions are placed on benefits, and
the additional restrictions placed on the benefits at such ages. If the premiums or
benefits vary by age, there shall also be a provision specifying an equitable
adjustment of premiums or benefits, or both, to be made in the event the age of a
covered person has been misstated, such provision to contain a clear statement of
the method of adjustment to be used. In no event, however, shall coverage be
required for any person during any period when, according to the person's correct
age, coverage would otherwise not be provided for the person under the policy.
(VII) A provision that the insurer will issue to the policyholder, for delivery to
each person insured, a certificate, which may be in summary form, setting forth the
essential features of the insurance coverage, including any applicable conversion
or continuation privilege, and to whom the benefits are payable. If family members
or dependents are included in the coverage, only one certificate need be issued for
each family unit.
(VIII) A provision that written notice of claim must be given to the insurer
within twenty days after the occurrence or commencement of any loss covered by
the policy. Failure to give notice within such time shall not invalidate nor reduce any
claim if it is shown not to have been reasonably possible to give such notice and
that notice was given as soon as was reasonably possible.
(IX) A provision that the insurer will furnish, to the person making claim or to
the policyholder for delivery to said person, such forms as are usually furnished by
it for filing proof of loss. If such forms are not furnished before the expiration of
fifteen days after the insurer receives notice of any claim under the policy, the
person making the claim shall be deemed to have complied with the requirements
of the policy as to proof of loss upon submitting, within the time fixed in the policy
for filing proof of loss, written proof covering the occurrence, character, and extent
of the loss for which claim is made.
(X) A provision that, in the case of claim for loss of time for disability, written
proof of such loss must be furnished to the insurer within ninety days after the
commencement of the period for which the insurer is liable, that subsequent
written proofs of the continuance of such disability must be furnished to the insurer
at such intervals as the insurer may reasonably require, and that, in the case of a
claim for any other loss, written proof of such loss must be furnished to the insurer
within ninety days after the date of such loss. Failure to furnish such proof within
such time shall not invalidate nor reduce any claim if it was not reasonably possible
to furnish such proof within such time if such proof is furnished as soon as
reasonably possible and in no event, except in the absence of legal capacity of the
claimant, later than one year from the time proof is otherwise required.
(XI) A provision that all benefits payable under the policy, other than benefits
for loss of time, will be payable pursuant to section 10-16-106.5 and that, subject to
due proof of loss, all accrued benefits payable under the policy for loss of time will
be paid not less frequently than monthly during the continuance of the period for
which the insurer is liable and that any balance remaining unpaid at the termination
of such period will be paid as soon as possible after receipt of such proof;
(XII) A provision that indemnity for loss of life shall be payable to the
beneficiary designated by the insured (but, when the policy contains conditions
pertaining to family status or provisions pertaining to coverage of family members,
the beneficiary may be the family member specified by the policy terms) or, if there
is no such designated or specified beneficiary, to such other person as is specified
in the policy and that all other indemnities of the policy are payable to the insured;
except that the group policy may provide that all or any portion of any benefits on
account of hospital, medical, and surgical or other services may be paid, at the
insurer's option, directly to the hospital or person rendering such services. The
group policy may provide that, if any benefit is payable to the estate of a person or
to a person who is a minor or otherwise not competent to give a valid release, the
insurer may pay such benefit, up to an amount not exceeding two thousand dollars,
to any relative by blood or connection by marriage of such person who is deemed by
the insurer to be equitably entitled thereto. Any payment made by the insurer in
good faith pursuant to the provisions of this subparagraph (XII) shall discharge the
insurer's obligation with respect to the extent of such payment.
(XIII) A provision that the insurer shall have the right and opportunity to
examine the person of the individual for whom claim is made when and so often as
it may reasonably require during the pendency of claim under the policy and also
the right and opportunity to make an autopsy in case of death where it is not
prohibited by law;
(XIV) A provision that no action at law or in equity shall be brought to recover
on the policy prior to the expiration of the time requirements for payment pursuant
to section 10-16-106.5 and after proof of loss has been filed in accordance with the
requirements of the policy and that no such action shall be brought at all unless
brought within three years from the expiration of the time within which proof of loss
is required by the policy.
(b) (I) The provisions of subparagraph (V) of paragraph (a) of this subsection
(3) shall not apply to dental insurance.
(II) The provisions of subparagraphs (V) and (XII) of paragraph (a) of this
subsection (3) shall not apply to policies issued to a creditor to insure debtors of
such creditor.
(III) The standard provisions required for individual health insurance policies
shall not apply to group health insurance policies.
(IV) If any provision of this section is, in whole or in part, inapplicable to or
inconsistent with the coverage provided by a particular form of policy, the insurer,
with the approval of the commissioner, shall omit from such policy any inapplicable
provision or part thereof and shall modify any inconsistent provision or part thereof
in such manner as to make the provision contained in the policy consistent with the
coverage provided by the policy.
(4) A carrier offering a group health benefit plan shall not establish rules for
eligibility for any individual to enroll under the plan based on any health status-related factors in relation to the individual or a dependent of the individual.
(5) A carrier writing health benefit coverage for an employee leasing
company shall ensure that any health benefit plan marketed or sold to such
company that covers employees in Colorado complies with all the provisions of
Colorado law that apply to large employer health plans, including consumer and
provider protections, mandated benefits, nondiscrimination and fair marketing
rules, preexisting limitations, and other required health plan policy provisions. All
health coverage plans sponsored by or marketed through an employee leasing
company shall be fully insured plans.
(6) A group sickness and accident insurance policy, other than a long-term
care policy, disability income policy, or supplemental policy covering a specified
disease or other limited benefit, issued, renewed, or reinstated on or after January 1,
2007, shall not contain any provision that limits or excludes payments under
hospital or medical benefits coverage to or on behalf of the insured because the
insured or any covered dependent sustained an injury while intoxicated or under the
influence of a controlled substance, as defined in section 18-18-102 (5), C.R.S.