Bill
SB 178
Colorado creates a one-time $40 million supplemental assessment on large health insurers to bolster subsidies, reinsurance, and affordability initiatives through the Health Insuran
SB 178 (2026A) Health Insurance Affordability Measures — Colorado
Overview
- Purpose: To modify and expand the Health Insurance Affordability Act (part 12) to bolster health insurance affordability in Colorado. The bill creates a new one-time supplemental assessment on health insurance companies, expands funding mechanisms for the Health Insurance Affordability Cash Fund, enhances investment flexibility for the enterprise, and adjusts revenue allocation and oversight related to subsidies, reinsurance, and exchange-related initiatives. It also introduces a loan from the Unclaimed Property Trust Fund to the cash fund and adds study and reporting requirements.
Key Provisions and Changes
1) Supplemental Assessment and Funding (Sections 1–4)
- One-time supplemental assessment: The Colorado Health Insurance Affordability Enterprise (the “enterprise”) may impose a one-time supplemental assessment of $40 million, divided equally among health insurance companies subject to the assessment.
- Eligible carriers: Defined as health insurance companies (including HMOs) with more than 20,000 lives in Colorado in 2025.
- Use of funds: Supplemental assessment money, along with the regular assessments and hospital special assessment, would fund specified enterprise activities, including subsidies, reinsurance, and affordability initiatives.
- Administrative costs: The enterprise may use up to 3% of its revenues to cover administrative costs related to implementing/maintaining the program.
- Investment authority: The enterprise may invest funds in the health insurance affordability cash fund without standard statutory investment restrictions and may contract with private professional fund managers under public bidding standards.
2) Cash Fund, Loans, and Interfund Arrangements (Sections 5, 6, 9)
- Cash fund creation: The Health Insurance Affordability Cash Fund remains the repository for revenues (fees, assessments, and other money).
- Unclaimed Property Trust Fund loan: A $100 million loan from the Unclaimed Property Trust Fund to the cash fund is authorized, with repayment over up to 25 years.
- Interfund mechanics: The loan is an interfund arrangement, not counted as state revenue, and must be repaid by the enterprise.
3) Subsidies and Enrollment Parameters (Section 6)
- Board recommendations: The Health Insurance Affordability Board will advise rules for subsidies supporting state-subsidized individual health coverage plans, prioritizing enrollment stability and customer predictability.
- Public input: The board must seek input in English and Spanish (and other languages on request) and show how input was integrated into final recommendations.
- Reporting: The board must report by February 15 each year on the share of revenues from fees and the supplemental assessment.
4) Study and Evaluation (Sections 8, 11)
- Optimization study: The enterprise must contract for a study (to be completed by July 1, 2027) evaluating restructuring of enterprise programs to increase affordability and maximize enrollment, including the potential creation of a Basic Health Program under federal law. Results due to Senate/House Health/Human Services committees within 30 days of completion; study repealed January 1, 2028.
5) Financial Management and Reporting (Sections 7, 10, 11)
- Performance audit: The state auditor will complete a performance audit by December 31, 2027, detailing annual revenues (including the supplemental assessment) and money allocated to the fund, among other items.
- Tax credits (expansion to exchange and enterprise): Tax credits under 10-22-110 are expanded to cover contributions to both the Colorado Health Insurance Exchange (the Exchange) and the enterprise.
- Eligible taxpayers: Qualified insurance companies contributing to either the Exchange or the enterprise.
- Cap: Initially up to $9 million total in credits annually (split: $5 million to those contributing to the Exchange, $4 million to those contributing to the Enterprise). The structure allows credits to be claimed in subsequent payments, subject to annual caps and pro rata adjustments if the cap would be exceeded.
6) Definitions and Clarifications (Sections 2, 3, 10, 12)
- Expanded definitions: Specifications for “Health Insurance Company,” “Supplemental Assessment,” and related terms to cover the new framework.
- Revisions to statutory language: Align the enterprise’s role, funding streams, and investment authority with the updated provisions.
Who Is Affected
- Health insurance companies operating in Colorado with more than 20,000 covered lives (as of 2025) are subject to the supplemental assessment.
- Hospitals and health insurers that pay enterprise fees/assessments (as designed) and those participating in the state’s affordability programs.
- Individuals enrolled or seeking subsidies for state-subsidized plans and those in the state marketplace (Exchange).
- Taxpayers who contribute to the Exchange or the Enterprise may benefit from expanded tax credits.
Timelines and Procedural Notes
- Supplemental assessment: Not earlier than January 1, 2027, with a one-time $40 million assessment. Administrative costs capped at 3% of enterprise revenues.
- Loan from Unclaimed Property Trust Fund: Executed after August 15, 2026; terms up to 25 years; repayment by August 15, 2051.
- Study completion: By July 1, 2027, with results due within 30 days to legislative health committees; repealed January 1, 2028.
- Performance audit: Due by December 31, 2027.
- Tax credits: Expanded to cover contributions through tax year 2027 and beyond, with annual caps and procedures for allocation notices and credits.
Impact Considerations
- The bill significantly increases funding flexibility for affordability programs, enabling a one-time funding boost plus long-term financing via a loan.
- It emphasizes enrollment stability and consumer predictability in subsidy design.
- It introduces more robust language around multilingual stakeholder input and accountability through audits and annual reporting.
- Administrative costs proportional to enterprise revenues ensure some ongoing overhead but should be monitored to preserve funds for programmatic goals.
Compiled from official sources — confirm details with the bill’s official record.
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