Aetna will no longer sell new small-group health insurance in Colorado and existing small-group clients will be moved off the plan in the next year, sending ripples through 1,200 companies and 5,200 employees and their dependents.
The state Division of Insurance verified the decision, but Aetna did not plan to alert policyholders until Friday.
"After reviewing our portfolio of small-group products, we have identified Colorado as a market where we feel we can no longer meet the needs of our customers while remaining competitive," Regional Aetna Spokeswoman Anjie Coplin says.
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For the 1,200 companies affected, coverage from other insurers is available for purchase, state insurance officials say.
"These are obviously employers offering insurance and will want to continue, so we would expect the market to work," says Jo Donlin, state Division of Insurance external-affairs director.
Based on state insurance regulations, Aetna must abandon the Colorado small-group market, which is defined as policies of one- to 50-person groups, until September 2015. During the summer, Aetna also announced it's terminating similar group coverage in Michigan.
If employers' policies expire between now and the end of March, they can renew their Aetna coverage once more for a year, Coplin says; however, for employers renewing between April and October of next year, renewal is only through March 2012. No new policies will be sold, and Aetna is still offering individual and large-group insurance in Colorado.
Prominent insurance companies also faced criticism in Colorado for saying new policies covering individual children would no longer be available. Last week, the Division of Insurance issued an emergency regulation, urging insurance companies to reassess the decision.
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