The Senate Bill S704, sponsored by James Seward, passed the Senate with a unanimous vote (58 to 0). This bill is to amend the insurance law in New York State, reverting the definition of “small group” to 2-50 employees. A companion bill appears to be in the works for the Assembly. We will advise when it is formalized.
WHAT DOES THAT MEAN?
Beginning January 2016, New York State amended the definition of “small group” for the purposes of health insurance to be defined as companies with 100 or fewer employees. As such, employers with 51 to 100 employees will be subject to New York State Small Group Community Rating requirements upon their renewals in 2016.
This change has a potential negative affect for this market segment. Previously, employers with 51 to 100 employees had health insurance premiums based on the demographics of their groups such as age and industry. Typically, this translated into the ability for employer groups to obtain preferred insurance premiums.
Insurance carriers also provided health plan options to this marketplace that were unavailable to employers in the “small group” (under 51) community rated marketplace. Many employers in the 51 to 100 marketplace will be transitioning to health plans with increases in premiums and reductions in benefits.
If the bill is passed and then adopted in a separate Assembly bill, it will return the small group definition to its traditional size and allow employers with 51-100 employees the ability to have preferred pricing and more control over the coverage available to their employees.
We will monitor this issue on an ongoing basis and keep you informed as the legislation develops.
