The Colorado marketplace for individual health insurance plans needs to improve its financial management and process for sponsoring events, a state audit found.

Connect for Health Colorado, the state’s Affordable Care Act health insurance marketplace, spent $5.8 million in the 2024 fiscal year on marketing and outreach and to sponsor events and organizations that educate the public about the organization’s services. The audit found Connect for Health did not consistently follow its own process for selecting events or organizations to sponsor, and it did not properly document sponsorship decisions. 

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About 30% of the sponsorships Connect for Health undertook between July 2023 and December 2024 did not focus on a Connect for Health target audience. 

“Without improvements, there’s an ongoing risk that sponsorships may not follow Connect for Health’s processes or align with its mission,” audit manager Kate Shiroff said in a statement. 

Colorado state legislators requested the audit after some expressed concerns about Connect for Health sponsoring a 2023 fundraiser for ProgressNow, a progressive political advocacy organization. The audit’s review of a sample of other sponsorships did not find “any instances in which Connect for Health sponsored an event for or donated money to a political fundraiser or political fundraising organization.”

About 300,000 Coloradans pay for health insurance through the individual market.

Extension of enhanced premium tax credits that support people who purchase health insurance through the state marketplace has been the primary item Democrats in Congress want included in a funding measure that could end the federal government shutdown. Members of Congress failed to reach an agreement on a short-term funding measure, and many federal government operations have been shut down since the new fiscal year started Oct. 1.

Republicans in the Senate need some Democratic support to pass a funding measure, but Democrats have refused to support the measure that passed the House without changes to Affordable Care Act tax credits. Insurance premiums are expected to skyrocket with the expiration of the tax credits at the end of this year.  

Corrective measures

Connect for Health should revise and expand its policies around sponsorship vetting procedures to ensure sponsorships align with the organization’s mission, auditors recommended. It also needs to better meet reporting requirements from a 2022 Colorado law related to its spending on its public awareness and outreach campaign. 

Auditors also found that Connect for Health has made some changes to its financial management since the state’s 2017 audit of the organization, but there is still room for improvement, they said. Connect for Health did not consistently document approval and receipts for credit card purchases, and its board has not overseen credit card purchases made by senior managers. 

The organization should clarify its financial management policies with specific guidance around documentation for transaction approvals and business reasons for those transactions. Its policies should also clearly address key activities within the organization and staff should be trained on those policies, auditors recommended. 

Connect for Health agreed to all of the audit recommendations and will implement them over the next year. CEO Kevin Patterson said Connect for Health is committed to transparency and accountability and ensuring the organization’s spending “serves the people of Colorado.” The audit committee also recognized improvements in Connect for Health’s contract management and staff spending oversight following the 2017 audit, Patterson said. 

“The audit found no evidence of politically motivated spending in our sponsorships, a key area of focus. Additionally, the audit confirmed that no funds were misused or used for personal gain,” Patterson said in a statement. “We take its findings seriously and have already begun implementing specific corrective measures to strengthen our fiscal practices.”