HB 1043 Brings Changes to Colorado Life Care Facilities

hb-1043-brings-changes-to-colorado-life-care-facilities

Colorado life care facilities must meet a certain set of standards to continue providing facility services according to state law. All facilities must post a form of security to be used as reserves to cover the provider’s life care agreement obligations, which can now include a surety bond with the updated regulations in HB 1043. Effective Aug. 2, the bill revises Colorado Statute 11-49-105 by setting financial requirements for life care facilities.

According to Colorado Statute 12-13-101, life care refers to the care provided for the life of an aged person, including services such as health care, medical services, board, lodging, and other necessities. A facility is defined as the place in which a provider undertakes to provide life care to a resident. Any organization falling under one or both of these categories must adhere to the regulations set by the State of Colorado concerning life care facilities.

Colorado Life Care Facilities Regulations

Regulations set by the Colorado Department of Regulatory Agencies require all life care facilities to meet the following standards to operate in Colorado:

  • Approved List of Stocks/Bonds: In accordance with C.R.S. 12-13-107 (2) (d), required reserves may include bonds and stocks selected from a list approved by the Commissioner. The list consists of lawfully issued bonds and other evidence of indebtedness, including:
    • Bonds issued from the United States or any related agency.
    • Guaranteed or insured as to the payment of principal and interest by the United States or any agency or instrumentality thereof.
    • Bonds issued from counties, districts, townships, municipalities, and political subdivisions within the states, territories, and districts of the United States.
  • Annual Report to Current/Prospective Residents: A provider must make its annual report available to residents upon request. The provider, at least annually, shall provide written notice of the right to receive the annual report to all residents of the provider. Written notice of this right must be provided to all prospective residents in materials distributed during the solicitation of any prospective residents.
  • Designation of Auditor to Examine Life Care Institutions: The Commissioner may designate an independent auditor to conduct examinations of a provider. Upon the prior written request of a provider, the Commissioner may designate the same independent auditor engaged by a provider to prepare certified statements of the facility’s financial state.
  • Notice of Intent to Become Life Care Institution: Any person or entity intending to act in the capacity of a life care institution must notify the Commissioner, in writing, at least 90 days prior to the execution of the initial life care contract.
  • Required Disclosures to Prospective Residents: Life care contracts must be written clearly and coherently, as well as show the value of all property transferred to a life care provider.
    • All printed matter used to solicit additional individuals to move into a life care facility must clearly state the extent of the financial responsibility assumed by parties interested in or connected with the provider. Certain disclosures to prospective residents must be provided and acknowledged in writing before any life care contract is created.

Required life care facility forms will need to be sent to the Colorado Division of Financial Services by fax at (303) 894-7886 or by direct mail at:

Colorado Division of Financial Services

1560 Broadway, Suite 1520

Denver, CO 80202

The facility must file a life care institutions quarterly report providing information on the number of life care residents in the facility, as well as other financial information including the amount of money currently held in escrow.

Life Care Annual Reports are required once a year including the name of a Certified Public Accounting (CPA) firm conducting the facility’s audit, CPA’s agent for service of process, names and titles of officers, directors, trustees, or other governing body, number of life care residents, total number of residents, and the amount currently held in escrow.

Other statutes and rules for life care institutions can be found on the Colorado Division of Financial Services’ website. For any other questions related to Code of Colorado Regulations pertaining to life care institutes, contact the Colorado Division of Financial Services at (303) 894-2336.

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About the Author

Michelle Cummings
Michelle is a senior at the University of Missouri - Columbia studying journalism with an emphasis in strategic communication. She is a member of the marketing department and outreach team for SuretyBonds.com, a leading provider of online bonding for clients nationwide.