These young adult coverage changes apply now to newly purchased plans. For existing plans, the changes will apply when the health plan policy is renewed. Click here to learn more.

This change reflects a 0.9% increase to the Medicare Hospital Insurance component of FICA that will be paid entirely by the employee.

While employers are not responsible for increasing their share of FICA taxes, they will be responsible for withholding the extra 0.9% for employees whose wages exceed $200,000.

For more information on this tax change from a private tax consulting firm, click here.

Last Updated: October 23, 2011

As part of federal health care reform, New York has received federal money, including Consumer Assistance Program (CAP) grants, to expand the help available to residents and small businesses who have questions or problems with their health insurance.

New York State’s Consumer Assistance Program is run by the non-profit Community Service Society of New York (CSS) under a contract with the State’s Department of Health. CSS operates a statewide network of community-based non-profit organizations, known as Community Health Advocates (CHA).  Through this network, CHA has expanded the consumer assistance services available to New Yorkers who would like help with both private and public health insurance issues.

The Small Business Assistance Program (SBAP), an expansion of the Community Health Advocates program, is specifically dedicated to helping small businesses in New York with employer-sponsored health insurance concerns, including how federal health care reform will affect them now and in the future.

You can learn more about Community Health Advocates and the services it offers, as well as other consumer assistance available to New York residents here.

Last Updated: October 24, 2012

According to interim guidance, compliance with nondiscrimination rules for insured group plans is delayed until after additional guidance is issued. To learn more, follow the links below:

IRS Notice 2010-63, the initial request for comment on this requirement

IRS Notice 2011-1, requests additional comments and delays implementation of the nondiscrimination rule for insured group health plans until further notice

Internal Revenue Code Section 105(h), existing nondiscrimination law for self-insured group health plans, on the Cornell University Law School, Legal Information Institute website

“New nondiscrimination requirements for fully insured group health plans,” an analysis and discussion of the rule and existing guidance by a private law firm commissioned by the national association of insurers (America’s Health Insurance Plans (AHIP))

Last Updated: October 24, 2012

The Summary of Benefits and Coverage (SBC) and Uniform Glossary are documents designed to help consumers understand their health insurance coverage and choices.  These documents  must be made available to plan purchasers, enrollees and those considering purchasing or enrolling in a plan. 

·         The Summary of Benefits and Coverage (SBC) is a standardized 8 page document that outlines major benefits, costs and limitations of the health plan.  It also includes information on consumer rights, appeals and grievances, and coverage examples for some typical costs under the plan.  To view a sample completed SBC, click here.

·         The Uniform Glossary provides typical definitions for common health insurance terms such as “deductible” and “co-payment”, and includes  a graphic to help explain how cost-sharing features of a plan work.  To view the uniform glossary, click here.

Health plans must make the SBC and glossary available at renewal and open enrollment, and within 7 business days of receiving a request from a potential or current purchaser or enrollee.  For employer-sponsored coverage, the SBC can be provided along with other required summary materials (e.g., Summary Plan Description), but the SBC must be prominently displayed and intact.

Additionally, the Uniform Glossary, a list of the plan’s network of providers, and information about a plan’s prescription drug coverage must be available on an Internet website or similar informational resource.

If changes are made that significantly affect covered benefits or services, a “notice of modification” must be provided to purchasers and enrollees no later than 60 days prior to the effective date of these changes.

When a business offers health insurance to their employees, they must coordinate with the insurance carrier to determine who will provide the SBC, in order to minimize duplication of effort.

For more information see this Fact Sheet at http://www.healthcare.gov/ or the following FAQs posted by the U.S. Department of Labor.

Employers were supposed to begin reporting this information in tax year 2011; however, the federal government is delaying the start of this requirement.

Under Notice 2012-9, the IRS has waived until further notice this reporting requirement for employers who file less than 250 W-2 forms in the preceding calendar year. Larger employers will have to begin reporting health insurance costs on their W-2 forms starting in 2012 (i.e., on W-2 forms generally issued to employees in January 2013).

How is the cost of coverage calculated for W-2 Forms?

What were the 1099 reporting requirements?

For example, existing health plans are limited in the changes they can make and still retain grandfathered status. According to interim regulations, if any of the following six types of changes are made to an existing benefits package, the plan will lose grandfather status. In brief, these changes are:

1. Elimination of all or substantially all benefits to diagnose or treat a particular condition.
2. Increase in a percentage cost-sharing requirement (e.g., raising an individual’s co-insurance requirement from 20% to 25%).
3. Increase in a deductible or out-of-pocket maximum by an amount that exceeds medical inflation plus 15 percentage points.
4. Increase in a co-payment by an amount that exceeds medical inflation plus 15 percentage points (or, if greater, $5 plus medical inflation).
5. Decrease in an employer’s contribution rate towards the cost of coverage by more than 5 percentage points.
6. Imposition of annual limits on the dollar value of all benefits below specified amounts.

Additionally, to be considered a grandfathered plan, a health plan must comply with certain record-keeping and notification requirements.

Employers may switch insurers and still maintain grandfathered status as long as the structure of the ‘new’ plan does not violate any of the other rules (e.g., no significant reduction or cutting of benefits, no increase in percentage cost-sharing for employees, etc.).

To learn more about the requirements for maintaining grandfathered plan status click here for information from the federal government.

Whether a specific benefit requirement will apply to a particular health plan will depend, in part, on whether the plan was in existence prior to March 23, 2010 (the day health care reform became law) and is considered a “grandfathered plan” or not. Click here for a discussion of "grandfathered plans."

Plans purchased in the group market prior to the enactment of federal reform that can claim grandfathered status will only have to comply with certain new rules. These rules take effect when the health plan renews after September 23, 2010 and include:          

• Prohibiting pre-existing condition exclusions for children under 19 - under NY law, insurers cannot deny coverage because of a pre-existing health condition, but they have been allowed to impose a waiting period of up to a year before they cover care for most pre-existing conditions under certain circumstances. Beginning in plan years on or after September 23, 2010, plans can no longer impose this year-long waiting period on coverage for pre-existing conditions for children under 19 years old.
  
  
• Removal of lifetime dollar limits - health plans will have to remove lifetime dollar limits on “essential health benefits”, which includes hospitalizations and maternity and newborn care.
  
  
• Annual limits - plans must raise their annual dollar limits for "essential health benefits" over time, as follows:
  
  
  • For policy years between Sept 23, 2010 and Sept 23, 2011, the annual limit cannot be lower than $750,000
    
    
  • For policy years between Sept 23, 2011 and Sept 23, 2012, the annual limit cannot be lower than $1,250,000
    
    
  • For policy years between Sept 23, 2012 and January 1, 2014, the annual limit cannot be lower than $2,000,000
    
    
  • In 2014, all annual limits on “essential health benefits” will be removed. 
    
    

  Insurers can seek a waiver to delay compliance with these annual limits rules if they can demonstrate that their current annual limits are necessary to prevent a significant loss of coverage or increase in premiums. Insurers that have been granted waivers must tell consumers that their policy does not meet the minimum legal requirements for annual benefits. To read more about these rules and to see a list of plans that have been granted and denied waivers, click here.

• Prohibition on rescissions – health plans cannot refuse to pay for claims that they had previously accepted and covered except in rare cases such as enrollee fraud or intentional misrepresentation. Additionally, if a plan makes a legal rescission of coverage they must give enrollees 30 days notice.
  

• Prohibiting pre-existing condition exclusions for children under 19 – under NY law, insurers cannot deny coverage because of a pre-existing health condition, but they have been allowed to impose a waiting period of up to a year before they cover care for most pre-existing conditions under certain circumstances. Beginning in plan years on or after September 23, 2010, plans can no longer impose this year-long waiting period on coverage for pre-existing conditions for children under 19 years old.
  
  
• Removal of lifetime dollar limits – health plans will have to remove lifetime dollar limits on “essential health benefits”, which includes hospitalizations and maternity and newborn care.
  
  
• Annual limits – plans must raise their annual dollar limits for "essential health benefits" over time, as follows:
  
  
  • For policy years between Sept 23, 2010 and Sept 23, 2011, the annual limit cannot be lower than $750,000
    
    
  • For policy years between Sept 23, 2011 and Sept 23, 2012, the annual limit cannot be lower than $1,250,000
    
    
  • For policy years between Sept 23, 2012 and January 1, 2014, the annual limit cannot be lower than $2,000,000
    
    
  • In 2014, all annual limits on “essential health benefits” will be removed.
    
    
• Preventive care – health plans will have to cover certain preventive care services for children and adults. Plans cannot charge any cost-sharing (e.g., co-payments or coinsurance) for these preventive care services when provided in-network. However, if the preventive service is not the main reason for the visit to the doctor’s office or if this service is billed separately from the office visit, the health plan can require cost-sharing for non-preventive care received during the visit. To see a list of covered preventive care services on the federal HealthCare.gov website, click here. And for more information and background from the federal government on the preventive care requirement, click here.
  
  
• Emergency Services – co-payment and co-insurance for out-of-network emergency services can’t be greater than those for in-network emergency services. Enrollees also can’t be forced to pay a larger deductible or face a higher out-of-pocket maximum for out-of-network emergency services than they would for general out-of-network services. However, some individuals who receive emergency care out-of-network may have to pay the difference between what the provider charges and what the health plan pays, up to certain limits. In NY, individuals in HMO plans will not have to pay this difference. Click here to read more about this requirement on the federal HealthCare.gov website.
  
  
• Choice of Provider – if a plan requires you to select a primary care provider (“PCP”) or pediatrician, you can designate any in-network primary care physician or pediatrician that is accepting new patients.
  
  
• Females in plans that offer OB-GYN services and require you to pick an in-network PCP can see an OB-GYN and receive OB-GYN services without a referral or prior authorization.
  
  
• Prohibition on rescissions – health plans cannot refuse to pay for claims that they had previously accepted and covered except in rare cases such as enrollee fraud or intentional misrepresentation. Additionally, if a plan makes a legal rescission of coverage they must give enrollees 30 days notice.
  
  
• Appeals Process – for plans created or purchased after March 23, 2010, federal rules establish a standardized processes for consumers who want to appeal an insurer's decision to deny a claim. This includes both appeals made through your health plan directly (internal review) and secondary appeals made through an independent reviewer (external review).
  
  
• Health plans’ internal appeals processes must comply with NYS and federal regulations. However, some new federal requirements have been delayed and may not take effect until plan years starting on or after July 1, 2011 or January 1, 2012, depending on the requirement.
  
  
  • For information on the timeframes for implementing the new federal requirements for internal appeals processes, click here.
    
    
• External appeals processes are subject to NYS regulations and, starting July 1, 2011, they may also be subject to new federal requirements.
  
  
• For information on NYS requirements, click here for a summary of internal review process requirements, and click here for a summary of external review process requirements
  
  
  • For information on new Federal internal and external review requirements, click here.
    
    

Last Updated: October 24, 2012

The federal government issued guidelines for the coverage of additional preventive health benefits for women by new and non-grandfathered  individual, sole proprietor, and group health plans.  These plans have to cover the following services consistent with the guidelines without cost sharing:

Newly purchased private health plans and “non-grandfathered plans” that renew on or after Aug. 1, 2012 are required to cover these additional women’s preventive guidelines.

“Non-grandfathered plans” refer to health plans purchased or changed after federal health care reform became law on March 23, 2010.

Health plans that were already in existence before reform and qualify as a “grandfathered plan” (e.g., the benefits have not changed significantly) are exempt from these requirements.

In addition to “grandfathered plans”, plans sponsored by certain religious employers can choose whether or not to cover contraceptive services.

An exempt religious employer is defined as one that:

1. Has as its purpose the instilling of religious values
2. Primarily employs persons who share its religious tenets
3. Primarily serves persons who share its religious tenets; and,
4. Is a non-profit organization

Non-profit, non-exempt religious employers that currently do not cover some or all forms of contraception in their group health plans are being granted a temporary enforcement “safe harbor”.

The safe harbor gives them until August 1, 2013, or when a plan first renews after this date, to meet the coverage requirements.

This safe harbor extension also applies to student health plans administered by non-profit institutions of higher education with similar criteria.

The federal government is in the process of developing alternative ways of ensuring contraceptive coverage for plan participants (i.e., individuals enrolled in the employer’s health plan) that will accommodate non-exempt, non-profit religious employers and non-profit institutions of higher education with an objection to contraceptive coverage.

Proposed methods for providing coverage that are under consideration include allowing non-exempt, non-profit religious employers to indicate their objections to contraception coverage and provide the health insurance company with a notice of their objection. If the employer self-insures the health plan, they would notify the third party administrator of the plan.

The health insurer or third party administrator, not the employer, would then be responsible for providing plan participants with access to the specified contraceptive services without cost sharing. 

Coverage requirements for these non-exempt employers will go into effect on or after August 1, 2013.

List of Services:
http://www.healthcare.gov/news/factsheets/2010/07/preventive-services-list.html#CoveredPreventiveServicesforWomenIncludingPregnantWomen
 
Brief Overview of Covered Services:
http://www.hrsa.gov/womensguidelines/

HHS Overview of new provisions
http://www.healthcare.gov/news/factsheets/2011/08/womensprevention08012011a.html

Last Updated: October 24, 2012

The Medical Loss Ratio (MLR) describes how much money a health insurer spends on medical-related care for its enrollees compared with what it spends on non-medical care, such as salaries and marketing.
 
Although the use of MLRs have been around for awhile, New York State law and the Affordable Care Act have set new standards and increased MLR requirements for insurers.

The Medical Loss Ratio tells you how your insurer used the money it was paid from everyone in the plan (all premiums).  As an example, an 80% MLR means that for every dollar in premiums collected, an insurer spent about 80 cents on medical-related care and 20 cents on administrative costs or profits.

The higher the MLR, the more the insurer is spending on medical-related services.  In general, for consumers, a higher MLR is better.  If the MLR is too high, however, the insurer may not have enough money to meet its expenses.  Insurers cannot spend more on expenses than they receive in premiums over the long run and still remain in business.

No, state and federal MLR rules only apply to health insurance carriers.  Self-insured plans, which include health plans offered by many large businesses, do not have to meet these MLR requirements. 

In addition, MLR requirements may differ for some plans, such as “expatriate” plans or “mini-med” plans.  For more information on these “special circumstance” plans and the MLR requirements in general, click here.

If insurers do not meet the MLR requirements, they have to give policyholders back some of their money. These refunds or rebates are due by August each year.

Health plans also have to inform enrollees about MLR requirements, and any potential rebates they may be getting. 

In 2012, more than 83,000 individuals, nearly 8,000 small businesses, and over 900,000 large businesses across New York State received rebates of more than $86.5 million.

For job-based coverage, the refunds or rebates go to the employer. Employers must use these rebates to benefit their workers who are enrolled in the plan. 

This means the employer is responsible for distributing these rebates to its employees in the form of a payment (like a check), a reduction in future premiums, or by providing enhanced benefits like wellness programs.  Employers generally have three months or ninety days in which to distribute the rebates. 

Depending on how an employer passes the rebate on to its employees, there could be income and/or payroll taxes due on it.  For more information, see Internal Revenue Service FAQs.

Last Updated: October 24, 2012

As part of the Affordable Care Act, there is a $2,500 annual limit on the amount an employee can put into a health flexible spending arrangement (FSA) starting in 2013.  This amount will increase for inflation in future years. 

The limit takes effect for cafeteria plan’s that start after 2012. (The “cafeteria plan” is a written document that allows the employer to offer a FSA.) More information about the annual limit and amending a cafeteria plan can be found here.

The Affordable Care Act changed the definition of medical expenses as it relates to over-the-counter drugs.

As of January 1, 2011, tax-preferred health accounts cannot be used to pay for a medication or drug (except insulin), unless the patient has a prescription for the drug. So, for example, if the drug is available over-the-counter, the doctor must write a prescription for it and the patient must provide documentation of the prescription along with the sales receipt in order to use the health flexible spending arrangements (FSA).

This change applies to FSAs, health reimbursement arrangements (HRAs), health savings accounts (HSAs) and Archer medical savings accounts (MSAs).

There is one exception: FSAs, HRAs, HSAs, and Archer MSAs can still be used to pay for insulin without a prescription.

It is important to note that the new rules only affect medications and drugs. These health accounts can still be used to pay for other qualified medical expenses without a prescription as currently permitted. For example, FSAs, HRAs, HSAs and Archer MSAs can be used to pay for health insurance deductibles or co-pays. These health accounts can also be used to pay for eligible medical devices, supplies and equipment, such as blood sugar tests, bandages and crutches.

As of January 15, 2011, the following criteria must be met if a patient wants to use a health account debit card to purchase these types of medications:

• Before making a purchase, the patient must give the pharmacist a prescription for the over-the-counter medicine or drug, and the pharmacist must dispense the item according to applicable rules. The item must also be assigned an Rx number.
  
  
• The pharmacy must follow IRS recordkeeping rules and retain documentation of the Rx number, the name of the purchaser (or the name of the person receiving the prescription) and the date and amount of the purchase.
  
  
• Transaction records must be available to the employer, or a third party acting on behalf of the employer, when requested.
  
  
• The debit card system must only accept charges for over-the-counter medicine if an Rx number has been assigned.
  
  
• Previous requirements for using a debit card to purchase over-the-counter medications must be met.
  
  

These rules apply to debit card purchases at drug stores, pharmacies, non-health merchants that operate pharmacies and mail order and web-based prescription drug vendors.

Different rules apply to “90 percent pharmacies” (pharmacies without an inventory information system that derived 90 percent of gross receipts during the prior taxable year from medical care expenses) and other types of vendors with health care-related merchant codes. For details, see IRS Notice 2011-5 and IRS Notice 2010-59.

For more information on these changes, see IRS Questions and Answers on Over-the-Counter Medicines and Drugs: http://www.irs.gov/newsroom/article/0,,id=227308,00.html

To learn more about HSAs and high-deductible health plans as well as for links to information on other tax-preferred health accounts, click here.

Last Updated: October 24, 2012

Through the ERRP, a temporary program to help businesses with health insurance costs for early retirees, participating businesses receive reimbursement by the federal government for a portion of the health care costs incurred by early retirees.

Early retirees include retirees who are at least 55 years old and not yet eligible for Medicare. Coverage for spouses and dependents of early retirees is also eligible for the ERRP.

Businesses can use these reimbursement funds to help reduce their own health insurance premium or care costs; to help relieve the cost of premiums, coinsurance, deductibles or co-pays to early retirees; or both.

For additional information about ERRP, please visit http://www.errp.gov/ or call the ERRP help line: 877-574-3777 (877-574-ERRP).  For an update on ERRP payment processing of claims, please visit http://www.errp.gov/news_events.shtml.

To view a list of businesses in New York that participated in the program, please visit http://www.healthcare.gov/law/provisions/retirement/states/ny.html.

Last Updated: November 9, 2012

The Community Living Assistance Services and Support (“CLASS”) program was a new federal long-term disability insurance program created by the Affordable Care Act.

The program was intended to help individuals who live at home and had a long-term disability pay for help with “activities of daily living” (eating, bathing, etc).

The CLASS program, which had been on hold due to concerns that it was not financially sound, has been cancelled by  the American Taxpayer Relief Act of 2012.  In its place,  a workgroup will be established to develop a plan for a comprehensive system for long term care services.

Starting in 2014, plans sold to individuals and small employers will have to cover 10 categories of “essential health benefits.”

The Affordable Care Act (ACA) lists the 10 categories of essential benefits:

• Ambulatory care
  
  
• Emergency services
  
  
• Hospitalization
  
  
• Maternity and newborn care
  
  
• Mental health and substance use disorder services, including behavioral health treatment
  
  
• Prescription drugs
  
  
• Rehabilitative and habilitative services and devices
  
  
• Laboratory services
  
  
• Preventive and wellness services and chronic disease management
  
  
• Pediatric services, including oral and vision care

All plans sold in the individual and small group markets – both inside and outside of NY’s Health Benefit Exchange – will have to cover these essential benefits.

“Grandfathered” plans (plans purchased before after March 23, 2010 that haven't been changed much), large group plans, and self-insured plans (usually offered by large employers) will not have to cover these benefits.

The Federal government is letting states pick one of their most popular plans to act as a reference or benchmark for the scope of services and limits on benefits to be covered in the 10 essential health benefit categories in 2014 and 2015.

New York State selected the largest small group plan in the state, the Oxford EPO, to be its reference or benchmark plan. NYS will fill in required benefits not included in the Oxford plan in the following areas:

• Pediatric dental/vision coverage
  
  
• Habilitative services
  
  
• Mental health/substance abuse parity

The benefits covered by the Oxford EPO plan are described in Exhibit 3 of this report.

Plans purchased by individuals or small businesses, inside or outside of NY’s Health Benefit Exchange, will cover a range of health care costs.

To make it easier to compare plans, they will be organized into 4 categories.  Each category describes how much of the total cost of covered care a health plan is expected to pay. This is known as the plan’s “actuarial value.”

Plans with a lower actuarial value will typically pay less and those with a higher value will typically pay more, as follows:

• Bronze plans – will have an actuarial value of 60%
  
  
• Silver plans – will have an actuarial value of 70%
  
  
• Gold plans – will have an actuarial value of 80%
  
  
• Platinum plans – will have an actuarial value of 90%

In other words, Bronze plans will typically pay for 60% of the total cost of covered care while Platinum plans will typically pay for 90% of total costs.

Actuarial value is calculated based on the typical way a standard population utilizes health care services. How much a plan actually pays may differ from these “typical” amounts, depending on things like what services you receive and the specific design of the health plan.

The total amount workers must pay out-of-pocket each year for services covered by their health plan will be limited.

These out-of-pocket limits are the same as those set for plans that can be used with a health savings account (HSA).  The limits can change each year, but in 2012, out-of-pocket limits for HSA-qualified plans are $6,050 for self-only coverage and $12,100 for family coverage.  These limits only apply to in-network care.  If your plan lets workers go out-of-network for care, worker out-of-pocket costs could be higher.  To learn more about health savings accounts, click here.

There will also be limits on your plan’s cost-sharing features, such as deductibles and co-payments. In general, deductibles for small businesses cannot be higher than $2,000 for single coverage and $4,000 for family coverage in 2014. This amount can increase each year.

• The deductible cannot apply to preventive care services that the ACA requires plans to cover without any cost-sharing.  To learn more about preventive care coverage for small business, click here.

Last Updated: October 24, 2012

Beginning January 1, 2014, large businesses (generally those with more than 50 “full-time equivalent” employees, not counting seasonal workers) must offer all full-time workers comprehensive, affordable coverage, or pay penalties called “shared responsibility payments.”

• In general, the size of the business is determined by dividing the hours regularly worked by employees, including part-time employees, by 30. This will be the total number of “full-time equivalent” employees at the business. If this number is greater than 50, then the employer is expected to offer coverage to all of its full-time workers.
  
  
• In general, employees who work at least 30 hours per week will be considered full-time employees.

Generally, only large businesses with more than 50 workers may face a financial penalty, called a “shared responsibility penalty”. Smaller businesses will not face a penalty if they do not offer health insurance.

There are two main ways a large business may face a penalty:

First, if a large business does not offer coverage and an employee receives financial help (premium assistance) to purchase coverage in an Exchange, the employer may face a fine of $2,000 for every full-time employee in excess of 30.

Second, if a large business offers coverage that is not affordable (it places excessive financial burden on the employee) or is “inadequate” (as determined by the federal government) and an employee receives financial help (premium assistance) for coverage in an Exchange, the business may have to pay the lesser of $3,000 for each employee receiving premium assistance, or $2,000 for every full-time employee in excess of 30.

Coverage will be considered “affordable” if the cost of a health plan does not exceed 9.5% of an employee’s household income.

In Notice 2012-58, employers are allowed to rely on wages reported on employees’ W-2 forms to determine whether coverage is affordable.  Under this notice, as long as the employee contribution for single (employee only) coverage does not exceed 9.5% of the worker’s wages as reported on the W-2 form, the employer will not be subject to the shared responsibility penalty – even if the employee gets premium assistance for coverage in the Exchange.

Last Updated: October 24, 2012

An Exchange – also referred to as a “marketplace” - is an organization that helps residents and small businesses purchase health insurance.
 
Under the Affordable Care Act (ACA), federally-approved Exchanges will be available in each state.  Each of these Exchanges will have a “Small Business Health Options” or SHOP program, that will help small businesses buy coverage.
 
The Exchange will also help eligible individuals purchase coverage, and some of people will get financial help to lower their health insurance costs.  To learn more about how Exchanges will serve individuals, click here.

New York is planning on operating its own Exchange.

On April 12, 2012, Governor Andrew M. Cuomo issued an Executive Order, creating New York’s Exchange.  It is called the NY Health Benefit Exchange.   You can read the Executive Order here or the press release here.

On December 14, 2012, the Centers for Medicare & Medicaid Services (CMS) provided conditional approval to New York State to operate a state-based Exchange.  To read the conditional approval letter from Secretary Sebelius, click here.

To visit the NY Health Benefit Exchange website, click here.

Federal law requires NY’s Exchange to do certain things for small businesses, such as:

• Help employers and their employees enroll in a health plan
  
  
• Allow employers and employees to apply for coverage online, over the phone, in-person and through the mail.  For example, NY’s Exchange will have a call center and a website through which employers can shop for coverage and employees can enroll in the coverage made available to them by their employers
  
  
• Allow employers and employees to fill out a single application to apply for and enroll in any plan in the Exchange
  
  
• Let employers offer their workers a choice of plans or have them all enroll in the same plan
  
  
• Provide administrative help to small businesses by collecting premiums and sending them to insurers on behalf of the employer.   For example, if an employer lets employees pick from plans offered by different insurers, the Exchange can send the employer one bill that lists what the employer and each employee owes
  
  
• Provide in-person help to businesses.  At this point, NY is planning on working with agents and brokers to help small businesses and their employees enroll in coverage in the SHOP Exchange.  According to NY’s planning documents, agents and brokers must have an active license and will have to enter into an agreement with NY’s Health Benefit Exchange.  They will also need to get a certification showing that they completed some educational requirements related to the SHOP
  
  
• Some very small business that buy coverage in the SHOP Exchange will be able to claim a tax credit for up to 50% of their health insurance costs.  The tax credit will go up to 35% for not-for-profit businesses that qualify for it in the SHOP

Plans in the Exchange will offer – at least – a set level of comprehensive benefits.

• All plans in NY’s Exchange – and those sold outside of it to individuals and small businesses -  will offer, at the least, “essential health benefits”.  Read more about  essential health benefits above, including the plan selected by NYS to act as a ‘benchmark’ or minimum standard for the benefits that all individual and small group market plans must offer in 2014 and 2015.

Plans in the Exchange will cover a range of health care costs.

• To make it easier to make a decision, health plans will be organized into 4 categories (Bronze, Silver, Gold and Platinum) according to how much of the total cost of covered care a health plan is expected to pay.

Plans in the SHOP Exchange will limit the amount workers must pay out-of pocket.

• In general, deductibles in the SHOP will be limited, and the total amount workers must pay out-of-pocket for services covered by their health plan will be limited. See the Benefit Requirements in 2014 section above to learn more about these cost-sharing limits.

NYS has received over $369 million from the federal government to plan and set up its Exchange for individuals and small businesses.  This includes money to help develop its underlying information technology system.
 
Once it is up and running, the Exchange must find a way to cover its own costs.  NY has not determined how it will do this yet.

Last Updated: March 13, 2013

The Affordable Care Act included funding to support the creation of CO-OPs, new non- profit, member-run health insurers.

CO-Ops will offer qualified health plans in the health insurance Exchanges starting in 2014.  They also are permitted to sell coverage in the individual and/or small group market outside of the Exchange.

CO-OPs will be private, non profit, member-run organizations. Members are individuals covered by the CO-OP, and each adult member can vote for the board of directors. The majority of the board must be members of the CO-OP.

CO-OP profits must be used to lower premiums, improve benefits or invest in programs that will improve the quality of health care for its members. This differs from for profit insurers that pay a portion of their profits to shareholders.

In February 2010, Freelancers Health Service Corporation was awarded $174 million in loans to set up a CO-OP in New York.  Although sponsored by Freelancers Union, a membership and advocacy organization for independent workers, the CO-OP will operate as an independent organization. At this point in time, it is expected to offer individual coverage through the New York health insurance Exchange.

Like all qualified health plans offered in the Exchange, premium and cost-sharing subsidies will be available for eligible low income individuals. Enrollment in the CO-OP is expected to begin in the fall of 2013, with coverage starting in January of 2014.

To learn more about the Freelancers CO-OP in New York, click here.

The Affordable Care Act set aside money to help private-sector, not-for-profit groups start CO-OPs. The money, which was available as low interest loans and grants that had be to repaid, was to help pay for startup costs and help these groups meet State financial requirements for health insurers.

Twenty-four organizations received loans to start CO-OPs before Congress eliminated most of the rest of the money to address the Fiscal Cliff at the end of 2012.  No more funds are available to help new organizations start a CO-OP.  However, some funds were left to help with administrative costs for the 24 organizations that had already received funds.

For More Information:

Text of the American Taxpayer Relief Act of 2012
http://www.gpo.gov/fdsys/pkg/BILLS-112hr8enr/pdf/BILLS-112hr8enr.pdf

DHHS Overview of CO-OPS
http://www.healthcare.gov/law/features/choices/co-op/index.html

DHHS CO-OP Fact Sheet
http://www.healthcare.gov/news/factsheets/2011/07/coops07182011a.html

Freelancers CO-OP announcement
http://www.freelancersunion.org/co-ops/index.html

CMS CO-OP Overview
http://cciio.cms.gov/resources/factsheets/coop_final_rule.html

Last Updated: January 15, 2013

Additionally, if you choose to offer insurance to your employees, these seasonal workers and their salaries would not count toward your eligibility for the new small business health insurance tax credit. For more information about this tax credit, click here.

Based on the information you provided and tax credits presently available (which will increase in 2014 and then eventually phase out), you may be eligible for a tax credit of roughly $4,250, depending on the specific circumstances of your business. If your business is a non-profit, the amount of the tax credit would be less, roughly $3,040.

In general, the health insurance tax credit functions inversely based on the business size and worker salaries: the credit is larger for smaller businesses that employ lower wage workers. Thus, the credit decreases as the follow increase: (a) the size of the business (up to a maximum of 25 employees) and (b) worker salaries (up to a maximum average of $50,000).