Colorado's SB24-205: What AgeTech & Caregiving Organizations Need to Know and Why Investors Should Care

Colorado SB24-205 Consumer Protections for Artificial Intelligence | Illustration Ezra Schwartz © 2025

Summary

Colorado's SB24-205 introduces comprehensive AI regulations that will significantly impact AgeTech companies and caregiving organizations using AI systems with seniors. Taking effect February 2026, the law requires AI developers and deployers to implement rigorous risk management for "high-risk" AI systems, conduct impact assessments, provide transparency to consumers, and report algorithmic discrimination.

Many AgeTech solutions might qualify as "high-risk" because they make or influence consequential decisions about health services, medication management, emergency responses, and essential care for vulnerable older adults.

Though enacted in Colorado, I believe this law creates ripple effects nationwide—companies operating across multiple states typically build compliance into their core systems rather than creating state-specific versions, leading to nationwide adoption of these standards. Additionally, Colorado's approach likely foreshadows similar legislation in other states, making early adaptation a competitive necessity.

For AgeTech investors, this legislation creates both challenges and opportunities—companies with robust AI governance will gain competitive advantages, command higher valuations, and face fewer barriers to scaling across states as similar regulations emerge. Organizations should begin compliance preparations now, treating this as a strategic opportunity rather than merely a regulatory burden slowing innovation.

Colorado recently enacted SB24-205, establishing robust consumer protections for AI systems. This landmark legislation represents one of the most comprehensive state-level approaches to AI regulation, with significant implications for the growing AgeTech and caregiving industries. As these sectors increasingly leverage AI to support aging populations, understanding the law's requirements is essential for both operational compliance and strategic planning.

How This Impacts AgeTech & Caregiving

The intersection of artificial intelligence and elder care has created innovative solutions that enhance independence and quality of life for seniors. AgeTech and caregiving organizations commonly deploy AI for health monitoring systems that detect falls and abnormal patterns, medication management platforms that ensure proper dosing, cognitive assessment tools that track mental health, care coordination systems that optimize caregiver scheduling, personalized recommendation engines that suggest interventions, and virtual companions that reduce isolation.

These technologies represent tremendous promise for addressing the growing needs of a large and very diverse aging population, from fall detection to social companions. However, they also present unique risks when deployed with vulnerable populations who may have limited technological literacy or cognitive impairments. Colorado's law recognizes that when AI makes or influences decisions about an individual's health, safety, or access to essential services, those systems deserve heightened scrutiny and governance.

Some AgeTech applications might qualify as "high-risk AI systems" under the law precisely because they impact fundamental aspects of seniors' wellbeing. When an AI system determines whether to alert emergency services about a potential fall, recommends adjustments to medication schedules, or influences care plan decisions, the stakes for equitable and unbiased functioning are particularly high.

Key Considerations for AgeTech Developers and Vendors of AI-Driven Products

The law places significant responsibility on those who create AI systems for the AgeTech market. Developers must exercise "reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination arising from the intended and contracted uses of the high-risk artificial intelligence system"¹ - a standard that will require thorough testing with diverse elder populations, including those with varying levels of cognitive ability, physical limitations, and technological familiarity.

Transparency becomes a central obligation, with developers required to provide deployers with "a statement disclosing specified information about the high-risk system"² that clearly articulates how the AI functions, its limitations, and potential risks. This must be accompanied by comprehensive "documentation necessary to complete an impact assessment of the high-risk system"³ - likely including training data characteristics, performance metrics across different demographic groups, and testing methodologies.

The law also mandates public accountability through statements about "how the developer manages any known or reasonably foreseeable risks of algorithmic discrimination"⁴ - requiring AgeTech developers to articulate their approach to identifying and mitigating potential biases that could disadvantage certain senior populations, such as those with particular health conditions or socioeconomic backgrounds.

Perhaps most significantly, the law creates ongoing vigilance requirements, with developers needing to disclose "to the attorney general and known deployers or other developers of the high-risk system any known or reasonably foreseeable risks of algorithmic discrimination, within 90 days after the discovery"⁵ - establishing a continuing obligation to monitor and report issues that may emerge as AI systems interact with elder populations in real-world settings.

For Caregiving Organizations Deploying AI-Driven Products and Systems

Organizations that implement AI technologies in caregiving contexts face equally substantial requirements. They must develop and implement "a risk management policy and program for the high-risk system"⁶ that systematically identifies potential harms and establishes protocols for addressing them. This is accompanied by the requirement to complete "an impact assessment of the high-risk system"⁷ before deployment - forcing organizations to thoughtfully consider how AI might affect different segments of their senior clientele.

Ongoing oversight is mandated through "annual reviews of the deployment of each high-risk system"⁸ to verify the technology isn't causing discriminatory outcomes. This creates a continuous improvement cycle rather than a one-time compliance check.

The law's consumer-facing provisions are particularly relevant in elder care contexts, requiring organizations to notify seniors when "the high-risk system makes, or will be a substantial factor in making, a consequential decision concerning the consumer"⁹ - ensuring transparency about when AI is influencing care decisions or assessments. This is coupled with mechanisms for recourse, providing "a consumer with an opportunity to correct any incorrect personal data"¹⁰ and "to appeal, via human review if technically feasible, an adverse consequential decision"¹¹ - critical protections for older adults who may be disproportionately affected by data errors or algorithmic misjudgments.

The transparency requirements extend to public disclosures about "how the deployer manages any known or reasonably foreseeable risks of algorithmic discrimination"¹² - requiring caregiving organizations to articulate their governance frameworks. And like developers, they must "disclose to the attorney general the discovery of algorithmic discrimination, within 90 days after the discovery"¹³ - creating a legal obligation to self-report problematic outcomes.

For All Organizations Creating or Deploying AI-Driven Products

The law creates a universal requirement to "ensure disclosure to each consumer who interacts with the artificial intelligence system that the consumer is interacting with an artificial intelligence system"¹⁴ - a particularly important provision for older adults who may have varying levels of technological awareness and deserve to know when they're communicating with AI rather than humans.

Action Steps for AgeTech & Caregiving Organizations

With compliance required by February 2026, forward-thinking organizations should begin preparation now. Importantly, starting this process doesn't need to be daunting or expensive, and could begin with a few simple steps: Providing training on managing AI risk and governance, assigning ownership and accountability within your organization, then evaluating, perhaps with legal help, if, as a vendor or implementor, you fall under the high-risk category, or might fall into the category in the future.

Start by conducting comprehensive audits of current AI systems to identify which applications qualify as "high-risk" under the law. This assessment should examine each technology's role in decision-making processes that affect seniors' care, health outcomes, or access to services.

Documentation of risk management practices should follow, developing systematic frameworks for identifying and mitigating algorithmic discrimination. In the context of elder care, this requires particular attention to how AI systems might disadvantage those with cognitive impairments, limited technology access, or specific medical conditions common among older populations.

A thorough review of data practices is essential, examining how AI systems are trained and tested to ensure they don't perpetuate biases against older adults. This includes evaluating whether training data adequately represents diverse elder populations and whether performance metrics account for varying levels of technological literacy and physical capability.

Organizations should begin developing consumer-friendly disclosure mechanisms that clearly explain when and how AI is being used in care settings. These must be accessible to older adults with varying levels of technological understanding and potentially diminished vision or cognitive processing.

Human review processes must be established, creating pathways for seniors or their designated representatives to appeal decisions influenced by AI systems. These appeals mechanisms should be designed with accessibility in mind, recognizing that traditional digital interfaces may present barriers for some older adults.

Finally, while Colorado leads the regulatory landscape, organizations should prepare for similar requirements to emerge in other states. Building a compliance framework that uses NIST AI RMF or ISO 42001 as guides* will create an adaptable foundation for evolving regulatory environments, positioning AgeTech companies for sustainable growth across jurisdictions.

Why Investors in AgeTech Should Pay Attention

For investors with stakes in the growing AgeTech sector, Colorado's AI law represents a significant development that will shape the competitive landscape and investment opportunities.

Competitive Advantage Through Early Compliance: Companies that proactively address algorithmic bias and build compliance-ready systems will establish meaningful market differentiation. Senior care organizations are likely to prioritize regulatory compliance in their vendor selection, and AgeTech firms with robust governance frameworks will capture market share. The runway before mandatory compliance creates an opportunity for forward-thinking companies to establish themselves as industry leaders in responsible AI.

Valuation Implications for Strategic Investors: As regulatory requirements become standardized, AgeTech startups with sophisticated AI governance structures will likely command premium valuations. Investors should recognize that compliance capabilities represent significant intellectual property and organizational capital. During due diligence processes, evidence of regulatory readiness will increasingly influence investment decisions and valuation models, particularly for technologies serving vulnerable populations where legal exposure is heightened.

Market Expansion Indicator for Growth Assessment: Colorado's law provides a useful litmus test for scalability. Companies that can successfully navigate these requirements demonstrate the governance maturity necessary for multi-state operations. Investors should evaluate their portfolio companies' compliance readiness as a proxy for growth potential, recognizing that the ability to adapt to varying regulatory frameworks will determine which AgeTech solutions can achieve national scale versus those limited to less regulated markets.

Risk Mitigation Value Creation: Early investment in compliance infrastructure reduces future legal exposure and potential reputational damage. For AgeTech companies working with vulnerable elder populations, the risk of algorithmic discrimination carries particularly severe consequences – both financially and ethically. Investors should recognize that resources allocated to compliance represent prudent risk management rather than merely administrative overhead, potentially preserving significant enterprise value by preventing regulatory enforcement actions or consumer litigation.

Product Development Strategic Alignment: Colorado's law effectively creates a roadmap for responsible AI development in elder care. By specifying requirements for impact assessments, risk management, and consumer transparency, the legislation outlines product features that will become standard across the industry. Investors should evaluate product roadmaps against these emerging standards, prioritizing companies whose development priorities align with regulatory direction rather than those that may require significant redevelopment to achieve compliance.

Exit Strategy Enhancement: As the AgeTech market matures, acquirers will increasingly scrutinize AI governance practices during transaction due diligence. Companies with mature compliance frameworks will present lower integration risks and liability exposure, making them more attractive acquisition targets. Strategic investors should view compliance capabilities as enhancing exit opportunities by expanding the pool of potential acquirers to include larger healthcare organizations with stringent risk management requirements.

Investors should prioritize AgeTech companies that demonstrate awareness of these regulatory trends and have concrete plans to implement responsible AI governance structures before the 2026 deadline. The companies that treat compliance as a strategic opportunity rather than a regulatory burden will likely deliver superior returns while advancing the ethical application of AI in elder care.

Citations from Colorado SB24-205:

Relevant to developers and vendors of AI-driven AgeTech products

¹ Section 6-1-1702(1): "ON AND AFTER FEBRUARY 1, 2026, A DEVELOPER OF A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM SHALL USE REASONABLE CARE TO PROTECT CONSUMERS FROM ANY KNOWN OR REASONABLY FORESEEABLE RISKS OF ALGORITHMIC DISCRIMINATION ARISING FROM THE INTENDED AND CONTRACTED USES OF THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM."

² Section 6-1-1702(2)(a): "A GENERAL STATEMENT DESCRIBING THE REASONABLY FORESEEABLE USES AND KNOWN HARMFUL OR INAPPROPRIATE USES OF THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM."

³ Section 6-1-1702(3)(a): "A DEVELOPER THAT OFFERS, SELLS, LEASES, LICENSES, GIVES, OR OTHERWISE MAKES AVAILABLE TO A DEPLOYER OR OTHER DEVELOPER A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM ON OR AFTER FEBRUARY 1, 2026, SHALL MAKE AVAILABLE TO THE DEPLOYER OR OTHER DEVELOPER, TO THE EXTENT FEASIBLE, THE DOCUMENTATION AND INFORMATION, THROUGH ARTIFACTS SUCH AS MODEL CARDS, DATASET CARDS, OR OTHER IMPACT ASSESSMENTS, NECESSARY FOR A DEPLOYER, OR FOR A THIRD PARTY CONTRACTED BY A DEPLOYER, TO COMPLETE AN IMPACT ASSESSMENT PURSUANT TO SECTION 6-1-1703 (3)."

⁴ Section 6-1-1702(4)(a): "ON AND AFTER FEBRUARY 1, 2026, A DEVELOPER SHALL MAKE AVAILABLE, IN A MANNER THAT IS CLEAR AND READILY AVAILABLE ON THE DEVELOPER'S WEBSITE OR IN A PUBLIC USE CASE INVENTORY, A STATEMENT SUMMARIZING: (I) THE TYPES OF HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEMS THAT THE DEVELOPER HAS DEVELOPED OR INTENTIONALLY AND SUBSTANTIALLY MODIFIED AND CURRENTLY MAKES AVAILABLE TO A DEPLOYER OR OTHER DEVELOPER; AND (II) HOW THE DEVELOPER MANAGES KNOWN OR REASONABLY FORESEEABLE RISKS OF ALGORITHMIC DISCRIMINATION..."

⁵ Section 6-1-1702(5): "ON AND AFTER FEBRUARY 1, 2026, A DEVELOPER OF A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM SHALL DISCLOSE TO THE ATTORNEY GENERAL, IN A FORM AND MANNER PRESCRIBED BY THE ATTORNEY GENERAL, AND TO ALL KNOWN DEPLOYERS OR OTHER DEVELOPERS OF THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM, ANY KNOWN OR REASONABLY FORESEEABLE RISKS OF ALGORITHMIC DISCRIMINATION ARISING FROM THE INTENDED USES OF THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM WITHOUT UNREASONABLE DELAY BUT NO LATER THAN NINETY DAYS AFTER THE DATE ON WHICH: (a) THE DEVELOPER DISCOVERS... OR (b) THE DEVELOPER RECEIVES FROM A DEPLOYER A CREDIBLE REPORT..."

Relevant to deployers of AI-driven AgeTech products

⁶ Section 6-1-1703(2)(a): "ON AND AFTER FEBRUARY 1, 2026, AND EXCEPT AS PROVIDED IN SUBSECTION (6) OF THIS SECTION, A DEPLOYER OF A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM SHALL IMPLEMENT A RISK MANAGEMENT POLICY AND PROGRAM TO GOVERN THE DEPLOYER'S DEPLOYMENT OF THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM."

⁷ Section 6-1-1703(3)(a): "A DEPLOYER, OR A THIRD PARTY CONTRACTED BY THE DEPLOYER, THAT DEPLOYS A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM ON OR AFTER FEBRUARY 1, 2026, SHALL COMPLETE AN IMPACT ASSESSMENT FOR THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM."

⁸ Section 6-1-1703(3)(g): "ON OR BEFORE FEBRUARY 1, 2026, AND AT LEAST ANNUALLY THEREAFTER, A DEPLOYER, OR A THIRD PARTY CONTRACTED BY THE DEPLOYER, MUST REVIEW THE DEPLOYMENT OF EACH HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM DEPLOYED BY THE DEPLOYER TO ENSURE THAT THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM IS NOT CAUSING ALGORITHMIC DISCRIMINATION."

⁹ Section 6-1-1703(4)(a): "ON AND AFTER FEBRUARY 1, 2026, AND NO LATER THAN THE TIME THAT A DEPLOYER DEPLOYS A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM TO MAKE, OR BE A SUBSTANTIAL FACTOR IN MAKING, A CONSEQUENTIAL DECISION CONCERNING A CONSUMER, THE DEPLOYER SHALL: (I) NOTIFY THE CONSUMER THAT THE DEPLOYER HAS DEPLOYED A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM..."

Relevant to all

¹⁰ Section 6-1-1703(4)(b)(II): "AN OPPORTUNITY TO CORRECT ANY INCORRECT PERSONAL DATA THAT THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM PROCESSED IN MAKING, OR AS A SUBSTANTIAL FACTOR IN MAKING, THE CONSEQUENTIAL DECISION."

¹¹ Section 6-1-1703(4)(b)(III): "AN OPPORTUNITY TO APPEAL AN ADVERSE CONSEQUENTIAL DECISION CONCERNING THE CONSUMER ARISING FROM THE DEPLOYMENT OF A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM, WHICH APPEAL MUST, IF TECHNICALLY FEASIBLE, ALLOW FOR HUMAN REVIEW..."

¹² Section 6-1-1703(5)(a): "ON AND AFTER FEBRUARY 1, 2026, AND EXCEPT AS PROVIDED IN SUBSECTION (6) OF THIS SECTION, A DEPLOYER SHALL MAKE AVAILABLE, IN A MANNER THAT IS CLEAR AND READILY AVAILABLE ON THE DEPLOYER'S WEBSITE, A STATEMENT SUMMARIZING: (II) HOW THE DEPLOYER MANAGES KNOWN OR REASONABLY FORESEEABLE RISKS OF ALGORITHMIC DISCRIMINATION THAT MAY ARISE FROM THE DEPLOYMENT OF EACH HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM..."

¹³ Section 6-1-1703(7): "IF A DEPLOYER DEPLOYS A HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM ON OR AFTER FEBRUARY 1, 2026, AND SUBSEQUENTLY DISCOVERS THAT THE HIGH-RISK ARTIFICIAL INTELLIGENCE SYSTEM HAS CAUSED ALGORITHMIC DISCRIMINATION, THE DEPLOYER, WITHOUT UNREASONABLE DELAY, BUT NO LATER THAN NINETY DAYS AFTER THE DATE OF THE DISCOVERY, SHALL SEND TO THE ATTORNEY GENERAL, IN A FORM AND MANNER PRESCRIBED BY THE ATTORNEY GENERAL, A NOTICE DISCLOSING THE DISCOVERY."

¹⁴ Section 6-1-1704(1): "ON AND AFTER FEBRUARY 1, 2026, AND EXCEPT AS PROVIDED IN SUBSECTION (2) OF THIS SECTION, A DEPLOYER OR OTHER DEVELOPER THAT DEPLOYS, OFFERS, SELLS, LEASES, LICENSES, GIVES, OR OTHERWISE MAKES AVAILABLE AN ARTIFICIAL INTELLIGENCE SYSTEM THAT IS INTENDED TO INTERACT WITH CONSUMERS SHALL ENSURE THE DISCLOSURE TO EACH CONSUMER WHO INTERACTS WITH THE ARTIFICIAL INTELLIGENCE SYSTEM THAT THE CONSUMER IS INTERACTING WITH AN ARTIFICIAL INTELLIGENCE SYSTEM."

NIST AI RMF and ISO 42001 – A Quick Primer: For those unfamiliar with these frameworks, the NIST AI Risk Management Framework (AI RMF) is a voluntary guidance developed by the U.S. National Institute of Standards and Technology that helps organizations address risks in designing, developing, using, and evaluating AI systems.

ISO 42001 is the first international standard for AI management systems, providing requirements for establishing, implementing, maintaining, and continually improving AI management systems within organizations.

Both frameworks offer structured approaches to identifying, assessing, and mitigating risks associated with AI systems, including those related to bias, privacy, and safety. They provide valuable roadmaps for implementing the governance structures required by Colorado's law, offering practical tools rather than abstract principles.

I'll be exploring these frameworks in greater detail in an upcoming article, demonstrating how they can serve as practical guides and foundations for compliance with emerging AI regulations.

I will cover the relationship between SB24-205 and HIPAA in another article.