Exclusives, Gold Dome, Health Care, Politics

Documents suggest Division of Insurance knowingly broke health care law in 2014

New emails obtained by Complete Colorado add support to the notion that the Colorado Division of Insurance (DOI) knowingly broke state law when the agency decided to allow some health plans to be sold last year.

The story begins on March 5, 2014, when President Obama announced a two-year extension for cancelled health plans, most of which were going to be cancelled because they didn’t meet all of the new requirements demanded by the Affordable Care Act (ACA, also known as ObamaCare). States such as Colorado that had their own health exchange would be able to decide for themselves whether they’d pick up this option offered by the President and allow these so-called “non-ACA compliant” plans to be sold.

For Colorado, however, the decision was a bit more tricky because of a law passed in 2013 designed to bring the state into maximum compliance with the ACA—a piece of legislation given the obvious shorthand of “the alignment bill.” One of the key provisions of the alignment bill was to ensure that all plans sold in 2014 and beyond were fully compliant with the benefits mandated by the ACA.

The DOI found itself in a quandary when the President made his announcement: How could they allow non-ACA compliant plans to be sold when the alignment bill prohibited them? Allowing the sale of these plans meant cancellation notices would be put off by a year, possibly two, which would minimize the negative press the ACA was creating in an election year for Democrats like then-Sen. Mark Udall.

On the same day President Obama made his announcement, DOI Communications Director Vincent Plymell addressed the issue in an email:

“What is our position? It would seem similar to the November 2013 proposal, in that we can’t allow [the sale of these health plans] due to the Alignment Bill. Is that correct? – Vince”

A top policy analyst for the DOI, Matt Mortier, responded: “I believe you’re right. We’re hard-coded in Section 70 (Effective date – applicability) that the alignment bill requirements apply to health-coverage plans (non-grandfathered plans) issued or renewed on or after January 01, 2014.”

It seemed that if non-ACA plans were to be sold, the DOI would have to go back to the General Assembly and ask for a legislative fix. In fact, the DOI was so convinced of this necessity, Plymell went so far as to draft a press release on March 17 that would announce the department’s intention to do just that.

The draft press release begins:

The Colorado Division of Insurance (DOI) will work to allow health insurance companies to extend their pre-ACA plans into 2016. This effort is in response to the March 5 announcement that the President and his administration would allow states to make such extensions possible.

This extension will require a change in state law, specifically __________. Currently, the law states that all plans sold or renewed in 2014 must comply with the ACA. The DOI and the Department of Regulatory Agencies (DORA, the Division’s home) will work with the legislature and the Governor’s office on the necessary legislation.

Instead of following through with the plan to seek approval from the legislature, the DOI instead simply issued a bulletin roughly six weeks later in May 2014.

As a legal justification, the DOI relied upon a clause — also in the alignment bill — that gives the insurance Commissioner the power to set rules regarding the ACA implementation. The only question then becomes whether the Commissioner’s rule making power allows him/her to exceed “hard coded” statute that details an outright ban on certain types of health plans. Such “rule making” clauses are usually intended to allow for adjustments that are within all other limits of the law — but don’t allow for legal limits to be exceeded, as appears to be the case here.

In an August 22 letter to four Republican Senators, Commissioner Salazar said:

C.R.S. Section 10-16-109 provides that “the commissioner may promulgate reasonable rules consistent with this article that are necessary or proper for implementing and administering this article, including rules necessary to align state law with the requirements imposed by federal law regarding health care coverage in this state.

The March 5, 2014 offer from President Obama to allow non-ACA compliant plans to be sold was not a requirement “imposed” by federal law; it was an option. Furthermore, the statutory portion quoted by Commissioner Salazar says the rules should be “consistent” with the alignment bill. It is highly debatable whether completely overturning a key criteria within the alignment bill would be legally deemed as “consistent.” Instead, the bulletin issued by the DOI appears completely incongrous with the alignment bill.

Complete Colorado sued the DOI for 11 months to gain access to the emails published in this report. Ultimately, DOI provided a majority of the emails sought in exchange for the lawsuit being dropped.

Ordinarily, when a bureaucracy oversteps its jurisdictional power, some kind of political outrage typically is generated. But in this unique situation, both Democrats and Republicans got enough of what they wanted that little issue was made of the DOI decision.



Democrats were able to stop the bleeding on the continuing bad news of cancelled health plans. Republicans were able to tell their constituents they had delivered a success by providing at least another year of keeping their original health plan.

However, the DOI’s actions raise significant issues about the rule of law and the extent to which government bureaucracies can act independently of the wishes of the legislative branch.

The issue did surface in the 2014 governor’s race. In a web-broadcast debate hosted by the Denver Post, Republican gubernatorial candidate Bob Beauprez directly challenged Democratic Gov. John Hickenlooper on the legality of his administration’s decision.

“John, you know I’m not a fan of ObamaCare, so let me be clear about that,” Beauprez began.

But I found it curious that part of Obamacare, uh, said all health care policies issued under ObamaCare had to be compliant with that law. And then the President – independently, without a vote on Capitol Hill, among Congress – the President independently said, ‘Well, we’ll just kick the can down the road,’ as some are wont to do, and, and allow non-ACA compliant plans to be renewed in 2014.

Your insurance commissioner said that would violate the law in Colorado. I think she was right. Because it’s a law that you signed that said every plan sold in Colorado had to be ACA-compliant. And then magically, a short while later, somebody reversed opinion within your administration and said, ‘We’ll ignore the law’ – that you signed – and go ahead and allow those plans to be renewed. Why’d you break the law, John, the law that you signed?

Governor Hickenlooper used the opportunity to extol some portions of the ACA he was pleased with, but did not address Beauprez’s question of legality in any meaningful sense. (Watch video of this portion of the debate here, begin at time 1:00:50.)

File photo - Todd Shepherd
File photo – Todd Shepherd

In July 2014, Complete Colorado published a story that provided lengthy documentation of DOI’s internal belief that a legislative remedy was needed to legally allow the sale of non-ObamaCare compliant plans. But none of that documentation displayed as much conviction and certainty as the emails provided above. Additionally, much the documentation that existed from 2014 included first hand accounts but from persons outside the bureaucracy. The new emails obtained and published by Complete Colorado now give first hand accounts from top DOI administrative officials like Commissioner Marguerite Salazar, Vincent Plymell, and Matt Mortier.

In our report from July of last year, then-State Representative Amy Stephens blasted the actions of the DOI and the Governor’s administration.  “HB [13]-1266 is very clear,” Stephens said last year. “It is the law in Colorado and does not offer ‘cover’ for the Commissioner or Governor to break the law. They broke the law, because like our lawless President – “they think they can” – and this is about trying to save the seats of a Democrat US Senator (Mark Udall) and the Governor (John Hickenlooper).”

No document shows when, why, or how the main players inside DOI changed their minds. But calendar records show that in between believing a legislative fix was needed and the decision to simply allow the plans to be sold under the authority of a division-issued bulletin, Commissioner Salazar met with top members of the Hickenlooper administration at the Governor’s offices in the Capitol.

Emails requesting comment have not been returned by either the DOI, or by members of the Hickenlooper administration.

Correction: The original publishing of this article did not provide Commissioner Salazar’s and the DOI’s explanation as to why they thought the bulletin they issued was legal. We regret not including those comments and arguments in the first few hours of publication of this article.

Special thanks to attorney Geoff Blue for his patience in discussing legal forms and open records laws.



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