Health insurance exchange board approves statewide fee

DENVER – Connect for Health Colorado’s board Monday approved the health insurance exchange’s budget for fiscal 2015, including a fee that will provide the exchange with $13 million to fill the gap in income that will be created when $45 million in federal funding ends.

The fee, called the health insurer market assessment, will be charged to insurance carriers and will amount to $1.25 per member, per month. That cost will be passed onto policyholders.

Legislative approval of such a fee was given last May, when lawmakers passed a bill allowing for up to $1.80 to be assessed in order to help fund the exchange. The fee is similar to one that used to fund Cover Colorado, the state’s program to insure high-risk individuals.

Cover Colorado was disbanded after the Affordable Care Act made it illegal for commercial carriers to turn away people with pre-existing conditions. To fund Cover Colorado, a fee of $3.76 per member, per month was assessed until the program ceased operations.

When the exchange first began forming in the second half of 2013, it was provided with $66 million in federal funding authorized by the Affordable Care Act. That number was reduced to $60 million in 2014, but in 2015, Connect for Health Colorado will receive only $15 million from the federal government, and will get no federal funding after that.

The $13 million from the insurer assessment, as well as increases in fees paid by those who use the exchange and decreases in expenses, are expected to balance the exchange’s budget in spite of the missing federal dollars in the years to come.

The $66 million budget includes improvements to technology and the potential purchase of a building in Colorado Springs, which will depend upon a return-on-investment analysis to be completed later this year. If approved, the building will be purchased for $3 million, funded by a grant. If the building purchase does not go forward, the money will be re-appropriated elsewhere.

The budget also includes $2.3 million for operating costs, $10.1 million for the exchange’s assistance network, which consists of 53 assistance sites statewide, and $6.9 million for general and administrative costs, which includes salaries and benefits.

The budget was passed with only one dissenting vote: Ellen Daehnick, a small business owner and member of the finance committee as well as the board.

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Molly Armbrister covers real estate, banking and health care for the Northern Colorado Business Report. She can be reached at 970-232-3139, or

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