Medical Expense Sharing Program Requirements

The bill imposes requirements on any organization that operates a medical expense sharing program (program), which is defined as a program, arrangement, or activity offered in Colorado that:

• Facilitates the sharing and payment of medical expenses among members using member-contributed funds; and
• Does not transfer to members of an organization or to the organization itself any risk or legal obligation to pay medical expenses.

An organization that operates a program must:

• Provide a notice to the public that the program is not an insurance plan or policy, that the organization is not engaged in the business of insurance, that payment of a member's medical bills is voluntary, that some medical expenses may be excluded despite requirements under health insurance laws for health insurance plans to cover such expenses, and that each person is personally responsible for paying the person's own medical bills;
• Before approving a membership application, obtain a signed written, signed affirmation from the applicant acknowledging that the applicant has received and understands the notice, has received other program materials, and understands that a third party may receive a commission for enrolling the member;
• Report specified financial and transactional information to members monthly and annually, which may be accomplished by sharing a link where the information is posted on the organization's public website;
• Submit to an annual, independent audit of the program's financial information;
• Post on its public-facing website and report to the attorney general by providing a link to the website specified information about the organization, including the name and contact information, program materials, the annual financial audit, and information about Colorado membership in the program;
• Operate only under the name or names reported on its public-facing website, not make or circulate any statement or publication representing that the program is insurance or otherwise materially misrepresenting the program terms and conditions, and not engage in an excess benefit transaction, as defined in the federal "Internal Revenue Code of 1986" (tax code), if the organization identifies as a nonprofit organization under the tax code; and
• Indicate on membership cards and in communications to providers that the program is not health insurance and that members are personally responsible for paying their own medical bills.

The attorney general is authorized to issue a notice of noncompliance to an organization that is failing to comply with the requirements specified in the bill, and if the organization's failure continues for more than 45 days, to seek an injunction or an administrative penalty in Denver district court.

The bill specifies that a program is exempt from state insurance laws if the program facilitates the sharing of member medical expenses by transferring member funds and the organization is a nonprofit organization under the tax code and does not own the member funds. Additionally, the bill states that the requirements imposed on organizations that operate programs must be applied in a manner that avoids excessive government entanglement with religion and that does not limit protections of religious exercise rights of an organization operating and members of a religious organization sharing program.

(Note: This summary applies to this bill as introduced.)