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Monday, 14 November 2011 22:00

Can We or Can’t We?

Written by KristenRussell
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In November of 2010, the Colorado Division of Insurance issued an order that resulted in the removal of its own long-standing Bulletin B-4.32, effective the following month (December 2010).

Then, Colorado Senate Bill 11-19 was signed into law with no fanfare and very little media attention on March 29, 2011. Let’s take a quick walk back through the progression of this legislative restructuring and see what these changes mean for you as an employer.

Under DOI Bulletin B-4.32, an employee on their own individual insurance plan (i.e. not on their employer’s group plan) was essentially unable to receive premium contributions from their employer via a Health Reimbursement Arrangement. The DOI’s stance was that an employer could only use HRA dollars to reimburse an employee’s individual premiums if the individual’s coverage complied with Colorado small group laws. This stance has, in the past, effectively canned any employer attempts to reimburse their employees for individual plan premiums outside of a taxable bonus.

Again, this Bulletin was removed in December 2010. Then, in March 2011, Senate Bill 11-19 came along and maintains that as long as a Colorado employer has not had a small group health plan in force at any time during the previous 12 months, it is now acceptable for the employer to reimburse an employee’s individual plan premiums using employer HRA dollars.

At first glance it would appear that, in a complete reversal of prior precedent, Colorado employers are now allowed to reimburse an employee’s individual plan premiums right? Well…sort of. If you drill down a bit further, you’ll quickly discover that we’ve got a good old-fashioned debate of State vs. Federal on our hands. While Colorado state law is now signing off on this practice, it would appear that to do so may still violate Federal ERISA, HIPAA and COBRA laws.

For an in-depth look at every angle of this case, we’ve gone to our good friend and local employment law expert Mark W. Major, J.D. Click here for the full story and Mark’s expert breakdown of this complex debate.

Read 3144 times Last modified on Monday, 14 September 2020 21:05