3 Colo. Code Regs. § 702-4-2-64-6

Current through Register Vol. 48, No. 1, January 10, 2025
Section 3 CCR 702-4-2-64-6 - [Effective 1/30/2025] Financial Requirements and Quantitative Treatment Limitations
A. All health benefit plans subject to the individual and group laws of Colorado must comply with the financial requirements and quantitative treatment limitations specified in 45 C.F.R. 146.136(c)(2) and (c)(3).
B. A health benefit plan that provides both medical/surgical benefits and mental health or substance use disorder benefits shall not apply any financial requirement or treatment limitation to mental health or substance use disorder benefits in any classification that is more restrictive than the predominant financial requirement or treatment limitation of that type applied to substantially all medical/surgical benefits in the same classification. Whether a financial requirement or treatment limitation is a predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in a classification is determined separately for each type of financial requirement or treatment limitation. A carrier shall not impose any financial requirement or treatment limitation that is applicable only with respect to mental health or substance use disorder benefits and not to any medical/surgical benefits in the same benefit classification.
C. A carrier shall not sell a health benefit plan or short term policy that fails to comply with Section 6 of this regulation, as specified in 45 C.F.R. § 146.136(c).
D. Calculation of Substantially All and Predominant Level Benefits
1. Carriers shall not use any financial requirement or quantitative treatment limitation unless the carrier can provide verification that the following conditions have been met:
a. Substantially All Test
(1) A type of financial requirement or quantitative treatment limitation is considered to apply to substantially all medical/surgical benefits in a classification of benefits if it applies to at least two thirds of all medical/surgical benefits in that classification.
(2) For the purposes of this regulation, benefits expressed as subject to a zero level of a type of financial requirement are treated as benefits not subject to that type of financial requirement, and benefits expressed as subject to a quantitative treatment limitation that is unlimited are treated as benefits not subject to that type of quantitative treatment limitation.
(3) If a type of financial requirement or quantitative treatment limitation does not apply to at least two-thirds of all medical/surgical benefits in a classification, then that type cannot be applied to mental health or substance use disorder benefits in that classification.
b. Predominant Level Test
(1) If a type of financial requirement or quantitative treatment limitation applies to at least two-thirds of all medical/surgical benefits in a classification as determined under Section 6.D.1.a, the level of the financial requirement or quantitative treatment limitation that is considered the predominant level of that type in a classification of benefits is the level that applies to more than one-half of medical/surgical benefits in that classification subject to the financial requirement or quantitative treatment limitation.
(2) If, with respect to a type of financial requirement or quantitative treatment limitation that applies to at least two-thirds of all medical/surgical benefits in a classification, there is no single level that applies to more than one-half of medical/surgical benefits in the classification subject to the financial requirement or quantitative treatment limitation, the plan (or health insurance issuer) may combine levels until the combination of levels applies to more than one-half of medical/surgical benefits subject to the financial requirement or quantitative treatment limitation in the classification. The least restrictive level within the combination is considered the predominant level of that type in the classification. (For this purpose, a plan may combine the most restrictive levels first, with each less restrictive level added to the combination until the combination applies to more than one-half of the benefits subject to the financial requirement or treatment limitation.)
(3) Carriers must follow the examples set forth 45 C.F.R. § 146.136 regarding the predominant level test.
c. Portion Based on Plan Payments

The determination of the portion of medical/surgical benefits in a classification of benefits subject to a financial requirement or quantitative treatment limitation (or subject to any level of a financial requirement or quantitative treatment limitation) is based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year (or for the portion of the plan year after a change in plan benefits that affects the applicability of the financial requirement or quantitative.

d. Classification for Certain Thresholds

For any deductible, the dollar amount of plan payments includes all plan payments with respect to claims that would be subject to the deductible if it had not been satisfied.

For any out-of-pocket maximum, the dollar amount of plan payments includes all plan payments associated with out-of-pocket payments that are taken into account towards the out-of-pocket maximum as well as all plan payments associated with out-of-pocket payments that would have been made towards the out-of-pocket maximum if it had not been satisfied. The rules of this paragraph apply for any other thresholds at which the rate of the plan payment changes.

2. Substantially All and Predominant Level Test Requirements
a. The expected claim payments shall be based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. If a carrier has sufficient plan-level claims data for a reasonable projection of expected claim payments, such claims data shall be used for the analysis.

Other reasonable claims data may be used to project expected claim payments only if there is insufficient plan-level claims data. The assumptions used in choosing a data set and making projections shall be submitted to the Division if plan-level claims data are not used.

A reasonable and credible method shall be used to project the expected claim payments for medical/surgical benefits when performing the financial requirement or quantitative treatment limitation analysis. The method shall use appropriate and sufficient data to perform the analysis in compliance with applicable Actuarial Standards of Practice.

b. Carriers shall not consider estimated claims payments associated with behavioral, mental health, or substance use disorder benefits in the calculation.
c. Carriers shall consider all estimated claims payments applying to the deductible and out-of-pocket maximum when calculating the deductible and out-of-pocket maximum applicability in determining if the deductible and out-of-pocket maximum apply to substantially all of the claims.
E. Allowed Benefit Classifications
1. If a plan provides any benefits for a mental health condition or substance use disorder in any classification of benefits described in Section 6.E.2., it must provide meaningful benefits for that mental health condition or substance use disorder in every classification in which medical/surgical benefits are provided. For purposes of this paragraph, whether the benefits provided are meaningful benefits is determined in comparison to the benefits provided for mental conditions and surgical procedures in the classification and requires, at a minimum, coverage of benefits for that condition or disorder in each classification in which the plan (or coverage) provides benefits for one or more medical conditions or surgical procedures. A plan (or coverage does not provide meaningful benefits under this paragraph unless it provides benefits for a core treatment for that condition or disorder in each classification in which the plan (or coverage) provides benefits for a core treatment for one or more medical conditions or surgical procedures. For purposes of this paragraph, a core treatment for a condition or disorder is a standard treatment or course of treatment, therapy, service, or intervention indicated by generally recognized independent standards of current medical practice. If there is no core treatment for a covered mental health condition or substance use disorder with respect to a classification, the plan (or coverage) is not required to provide benefits for a core treatment for such condition or disorder in that classification (but must provide benefits for such condition or disorder in every classification in which medical/surgical benefits are provided). In determining the classification in which a particular benefit belongs, a plan (or health insurance issuer) must apply the same standards to medical surgical benefits and to mental health or substance use disorder benefits. To the extent that a plan (or health insurance coverage) provides benefits in a classification and imposes any separate financial requirement or treatment limitation (or separate level of a financial requirement or treatment limitation) for benefits in the classification, the rules of this paragraph apply separately with respect to that classification for all financial requirements or treatment limitations. The following classification of benefits are the only classifications used in applying the rules of this paragraph, in addition to the permissible sub-classifications described in Section 6.F.
2. The substantially all/predominant level test must be applied separately to the following six (6) classifications of benefits:
a. Inpatient In-Network;
b. Inpatient Out-of-Network;
c. Outpatient In-Network;
d. Outpatient Out-of-Network;
e. Emergency care; and
f. Prescription drugs.
F. Special Rules

Unless specifically permitted under this paragraph, sub-classifications are not permitted when applying the rules of paragraph D of this section.

1. If a plan applies different levels of financial requirements to different tiers of prescription drug benefits based on reasonable factors determined in accordance with the rules in Section 7 (relating to requirements for non-quantitative treatment limitations) and without regard to whether a drug is generally prescribed with respect to medical/surgical benefits or with respect to mental health or substance use disorder benefits, the plan satisfies the parity requirements of this paragraph with respect to prescription drug benefits. Reasonable factors include cost, efficacy, generic versus brand name, and mail order versus pharmacy pick-up.
2. Multiple In-Network Tiers. If a carrier provides benefits through multiple tiers of in-network providers (such as an in- network tier of preferred providers with more generous cost-sharing to members than a separate in-network tier of participating providers), the carrier may divide its benefits furnished on an in-network basis into sub-classifications that reflect network tiers, if the tiering is based on reasonable factors determined in accordance with the rules in Section 7 (such as quality performance and market standards) and without regard to whether a provider provides services with respect to medical/surgical benefits or mental health or substance use disorder benefits. After the sub-classifications are established, the carrier may not impose any financial requirement or treatment limitation on mental health or substance use disorder benefits in any sub-classification that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in the sub-classification using the methodology set forth in paragraph D of this section.
3. Sub-classifications permitted for office visits, separate from other outpatient services. For purposes of applying the financial requirement and treatment limitation rules of Section 6, a health benefit plan or carrier may divide its benefits furnished on an outpatient basis into the two sub-classifications described in this paragraph. After the sub-classifications are established, the plan or issuer may not impose any financial requirement or quantitative treatment limitation on mental health or substance use disorder benefits in any sub-classification that is more restrictive than the predominant financial requirement or quantitative treatment limitation that applies to substantially all medical/surgical benefits in the sub-classification using the methodology set forth in paragraph D of this section. Sub-classifications other than these special rules, such as separate sub-classifications for generalists and specialists, are not permitted. The two sub-classifications permitted under this paragraph are:
a. Office visits (such as physician visits), and
b. All other outpatient items and services (such as outpatient surgery, facility charges for day treatment centers, laboratory charges, or other medical items).
G. No separate cumulative financial requirements or cumulative quantitative treatment limitations

A carrier may not apply any cumulative financial requirement or cumulative quantitative treatment limitation for mental health or substance use disorder benefits in a classification that accumulates separately from any established for medical/surgical benefits in the same classification.

H. Parity requirements with respect to aggregate lifetime and annual dollar limits.
1. Plan with no limit or limits on less than one-third of all medical/surgical benefits.

If a plan (or health insurance coverage) does not include an aggregate lifetime or annual dollar limit on any medical/surgical benefits or includes an aggregate lifetime or annual dollar limit that applies to less than one-third of all medical/surgical benefits, it may not impose an aggregate lifetime or annual dollar limit, respectively, on mental health or substance use disorder benefits.

2. Plan with a limit on at least two-thirds of all medical/surgical benefits.

If a plan (or health insurance coverage) includes an aggregate lifetime or annual dollar limit on at least two-thirds of all medical/surgical benefits, it must either-

a. Apply the aggregate lifetime or annual dollar limit both to the medical/surgical benefits to which the limit would otherwise apply and to mental health or substance use disorder benefits in a manner that does not distinguish between the medical/surgical benefits and mental health benefits or substance use disorder benefits; or
b. Not include an aggregate lifetime or annual dollar limit on mental health or substance use disorder benefits that is less than the aggregate lifetime or annual dollar limit, respectively m on medical/surgical benefits.
3. Determining one-third and two-thirds of all medical/surgical benefits.

For purposes of this paragraph H, the determination of whether the portion of medical/surgical benefits subject to an aggregate lifetime or annual dollar limit represents one-third or two-thirds of all medical/surgical benefits is based on the dollar amount of all plan payments for medical/surgical benefits expected to be paid under the plan for the plan year (or for the portion of the plan year after a change in plan benefits that affects the applicability of the aggregate lifetime or annual dollar limits). Any reasonable method may be used to determine whether the dollar amount expected to be paid under the plan will constitute one-third or two-thirds of the dollar amount of all plan payments for medical/surgical benefits.

4. Plans not described in paragraph H.1. or H.2. of this section
a. In general, a group health plan that is not described in paragraph H.1. or H.2. of this section with respect to aggregate lifetime or annual dollar limits on medical/surgical benefits, must either:
(1) Impose no aggregate lifetime or annual dollar limit, as appropriate, on mental health or substance us disorder benefits; or
(2) Impose an aggregate of annual dollar limit on mental health or substance use disorder benefits that is no less than an average limit calculated for medical/surgical benefits in the following manner. The average limit is calculated by taking into account the weighted average of the aggregate lifetime or annual dollar limits, as appropriate, that are applicable to the categories of medical/surgical benefits. Limits based on delivery systems, such as inpatient/outpatient treatment or normal treatment of common, low-cost conditions (such as treatment of normal births), do not constitute categories for purposes of this paragraph. In addition, for purposes for determining weighted averages, any benefits that re not within a category that is subject to a separately-designed dollar limit under the plan are taken into account as a single separate category by using an estimate of the upper limit on the dollar amount that a plan may reasonably be expected to incur with respect to such benefits, taking into account any other applicable restrictions under the plan.
b. For purposes of this paragraph H.4., the weighting applicable to any category of medical/surgical benefits is determined in the manner set forth in paragraph H.3. for determining one-third or two-thirds of all medical surgical benefits.
5. Nothing in this section shall prohibit a carrier from:
a. Providing some benefits that are subject to the deductible and other benefits that are not subject to the deductible within the same classification; or
b. Applying, separately, a deductible or out-of-pocket maximum that differs between the in-network and out-of-network benefit levels, as long as the same deductible or out-of-pocket that applies to behavioral, mental health, or substance use disorder benefits applies to medical/surgical benefits.

3 CCR 702-4-2-64-6

37 CR 11, June 10, 2014, effective 7/1/2014
37 CR 12, June 25, 2014, effective 7/15/2014
Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/15/2014
37 CR 23, December 10, 2014, effective 1/1/2015
38 CR 03, February 10, 2015, effective 3/15/2015
38 CR 06, March 25, 2015, effective 4/30/2015
38 CR 09, May 10, 2015, effective 6/1/2015
38 CR 13, July 10, 2015, effective 7/30/2015
38 CR 19, October 10, 2015, effective 11/1/2015
38 CR 21, November 10, 2015, effective 1/1/2016
38 CR 23, December 10, 2015, effective 1/1/2016
39 CR 01, January 10, 2016, effective 2/1/2016
39 CR 05, March 10, 2016, effective 4/1/2016
39 CR 08, April 25, 2016, effective 5/15/2016
39 CR 19, October 10, 2016, effective 11/1/2016
39 CR 20, October 25, 2016, effective 1/1/2017
39 CR 22, November 25, 2016, effective 1/1/2017
39 CR 23, December 10, 2016, effective 1/1/2017
39 CR 23, December 25, 2016, effective 1/1/2017
40 CR 03, February 10, 2017, effective 3/15/2017
40 CR 09, May 10, 2017, effective 6/1/2017
40 CR 15, August 10, 2017, effective 9/1/2017
40 CR 17, September 10, 2017, effective 10/1/2017
40 CR 21, November 10, 2017, effective 12/1/2017
41 CR 04, February 25, 2018, effective 4/1/2018
41 CR 05, March 10, 2018, effective 6/1/2018
41 CR 08, April 25, 2018, effective 6/1/2018
41 CR 09, May 10, 2018, effective 6/1/2018
41 CR 11, June 10, 2018, effective 7/1/2018
41 CR 15, August 10, 2018, effective 9/1/2018
41 CR 17, September 10, 2018, effective 10/1/2018
41 CR 18, September 25, 2018, effective 10/15/2018
41 CR 21, November 10, 2018, effective 12/1/2018
41 CR 23, December 10, 2018, effective 1/1/2019
42 CR 01, January 10, 2019, effective 2/1/2019
41 CR 19, October 10, 2018, effective 3/1/2019
42 CR 03, February 10, 2019, effective 4/1/2019
42 CR 04, February 25, 2019, effective 4/1/2019
42 CR 06, March 25, 2019, effective 6/1/2019
42 CR 08, April 10, 2019, effective 6/1/2019
42 CR 15, August 10, 2019, effective 9/1/2019
42 CR 17, September 10, 2019, effective 10/1/2019
43 CR 02, January 25, 2020, effective 12/20/2019
43 CR 02, January 25, 2020, effective 12/23/2019
42 CR 23, December 10, 2019, effective 1/1/2020
43 CR 01, January 10, 2020, effective 2/1/2020
42 CR 24, December 25, 2019, effective 2/2/2020
43 CR 06, March 25, 2020, effective 4/15/2020
43 CR 10, May 25, 2020, effective 8/1/2020
43 CR 14, July 25, 2020, effective 8/15/2020
43 CR 17, September 10, 2020, effective 10/1/2020
43 CR 18, September 25, 2020, effective 11/1/2020
43 CR 22, November 25, 2020, effective 12/15/2020
43 CR 24, December 25, 2020, effective 1/15/2021
44 CR 03, February 10, 2021, effective 3/15/2021
44 CR 08, April 25, 2021, effective 5/15/2021
44 CR 09, May 10, 2021, effective 6/1/2021
44 CR 10, May 25, 2021, effective 6/14/2021
44 CR 10, May 25, 2021, effective 6/15/2021
44 CR 13, July 10, 2021, effective 8/1/2021
44 CR 15, August 10, 2021, effective 9/1/2021
44 CR 19, October 10, 2021, effective 11/1/2021
44 CR 21, November 10, 2021, effective 12/1/2021
44 CR 23, December 10, 2021, effective 12/30/2021
44 CR 21, November 10, 2021, effective 1/1/2022
44 CR 23, December 10, 2021, effective 1/15/2022
44 CR 24, December 25, 2021, effective 1/15/2022
45 CR 03, February 10, 2022, effective 3/2/2022
45 CR 08, April 25, 2022, effective 5/30/2022
45 CR 09, May 10, 2022, effective 5/30/2022
45 CR 10, May 25, 2022, effective 6/14/2022
45 CR 11, June 10, 2022, effective 6/30/2022
45 CR 11, June 10, 2022, effective 7/15/2022
45 CR 19, October 10, 2022, effective 11/1/2022
45 CR 20, October 25, 2022, effective 11/14/2022
45 CR 21, November 10, 2022, effective 11/30/2022
45 CR 24, December 25, 2022, effective 1/14/2023
46 CR 01, January 10, 2023, effective 2/14/2023
46 CR 06, March 25, 2023, effective 2/15/2023
46 CR 03, February 10, 2022, effective 3/2/2023
46 CR 04, February 25, 2023, effective 3/17/2023
46 CR 05, March 10, 2023, effective 4/15/2023
46 CR 09, May 10, 2023, effective 5/30/2023
46 CR 09, May 10, 2023, effective 6/1/2023
46 CR 10, May 25, 2023, effective 6/15/2023
46 CR 11, June 10, 2023, effective 6/30/2023
48 CR 01, January 10, 2025, effective 1/30/2025