(1) The commissioner shall promulgate rules setting forth the application procedure for cooperatives seeking a waiver under this section that:

(a) Establish fair, effective, and timely procedures for addressing consumer, contractor, and health plan grievances. Such rules shall include, without limitation, a requirement that health plans provide the cooperative written notification of all grievances filed with the health plans and at least a quarterly summary of such grievances. This paragraph (a) shall not be construed to exempt participating carriers from any requirements of this title concerning grievance procedures.

(b) Require the cooperative to demonstrate that it provides coverage in every geographic area in which its participating carriers are authorized to do business by the division of insurance;

(c) Establish that small employers that purchase fully insured products through the cooperative are not permitted to offer their employees comparable fully insured or self-insured products through any means other than the cooperative;

(d) Ensure that the cooperative will at all times comply with the provisions of section 10-16-1009 (4)(g);

(e) Require the cooperative to offer, at a minimum, the basic and standard benefit plans for employers with fifty or fewer employees that all participating carriers must offer. Other benefit plans and benefit packages may be established and offered by some or all carriers that contract with the cooperative, and such plans or packages may include a range of cost-sharing levels. Benefit packages may also include some variations for differences in delivery systems, such as health maintenance organizations, point-of-service plans, preferred provider plans, and fee-for-service plans.

(2) A waiver shall be in effect for a period of not less than ten years after the date of issue, unless the commissioner determines that the waivered cooperative is in violation of subsection (1) of this section. In such a case, the waiver may be phased out over a period of three years by the commissioner in a manner that is consistent with the market viability of the cooperative.

(3) The commissioner may grant a permanent waiver effective upon expiration of a ten-year period. If at any time the commissioner determines that a waivered cooperative operating under a permanent waiver is in violation of subsection (1) of this section, the permanent waiver may be phased out by the commissioner over a period of three years in a manner that is consistent with the market viability of the cooperative.

(4) The commissioner shall promulgate rules for annual reporting requirements for waivered cooperatives. Reporting requirements shall be based only on the requirements for obtaining a waiver as outlined under subsection (1) of this section. Such reporting requirements shall be integrated with other reporting requirements for cooperatives operating under this part 10.

(5) (a) (I) Any carrier doing business with a waivered cooperative shall comply with all rules regarding underwriting, claims handling, sales, solicitation, and other applicable requirements specified pursuant to this title.

(II) Notwithstanding the provisions of subparagraph (I) of this paragraph (a), if a waivered cooperative requires its participating small employer carriers to offer a standardized health benefit plan that such carriers do not offer outside of the waivered cooperative, such carriers shall not be required to market that standardized plan either inside or outside the waivered cooperative in those areas of the state that are not part of the waivered cooperative's geographic service area.

(b)

(I) Any carrier doing business with a waivered cooperative shall comply with all applicable rules regarding rating specified pursuant to this title.

(II) (A) Notwithstanding subparagraph (I) of this paragraph (b) and subject to the provisions of sub-subparagraph (B) of this subparagraph (II), a waivered cooperative and a participating carrier may negotiate a percentage discount off of what would otherwise be allowable rates under sections 10-16-107 (6)(a) and 10-16-1012 for a particular plan. That percentage discount shall be applied uniformly to all small employer members of the cooperative. Pursuant to section 10-16-1012, a carrier may apply rating factors differently for its business with a waivered cooperative than for the carrier's other business. Participating carriers shall notify the division of insurance of a negotiated cooperative discount at least thirty days prior to use.

(B) A waivered cooperative may negotiate the non-health-care expense component of the premium rates charged with participating health care coverage plans. As used in this sub-subparagraph (B), "non-health-care expense" includes but is not limited to marketing expenses, acquisition expenses, cost of paying claims, commissions, maintenance expenses, other administration costs, profits, and other contingency margins. "Non-health-care expense" does not include fees paid to health care providers for health care services regardless of the methodology of reimbursement or payment.

(C) Participating health care coverage plans, including those plans that are under consideration for participation, shall, upon request, disclose to waivered cooperatives a list and description of all relevant public information regarding all expenses of the health plans, including but not limited to: The plan's recent filings and previously required filings with the Colorado division of insurance; filings with the national association of insurance commissioners (NAIC); health employer data information set (HEDIS) reports regarding provider compensation; and federal health care financing administration and federal office of personnel management filings relevant to provider compensation. Public information shall be provided upon request to a cooperative within fifteen days after such request.

(D) All health care plans participating in a cooperative shall sign an affidavit declaring that all coinsurance paid by the insured participants of the employer members of a waivered cooperative shall be based on the health plan's contracted rate within the health plan's provider network.

(6) If the commissioner does not act on an application for a waiver under this section within sixty days after submission of the application, the cooperative may request a formal hearing with the commissioner.