The new definition of a small business health insurance group starting in 2016.
Starting January 1, 2016 the definition of a small business health insurance plan will be changing from 1 - 50 full time employees to 1 - 100 full time equivalent employees. All non grandfathered groups with 51 to 100 employees in New York will be reclassified as a small group and will be offered a small business plan from the insurance companies.
How will this impact these insurance plans?
Businesses will now have to count there part time employees towards the total equivalent full time employee count. So a business with 80 full time employees and 50 part time employees will now be considered a group of 105 employees for insurance purposes. A group of over 100 will still be considered a large group and rated as such. Conversely a business with only 80 full time employees will be considered a small business and will be offered a small business plan. The groups that will be rerated a small business will have serious changes to there health insurance plan. Many of the small business health insurance plans will use a much smaller network of providers, In New York these companies are EmblemHealth and Empire Blue Cross. So if you are currently a business with a large group plan with Emblemhealth or Empire Blue Cross and will be re rated as a small group in 2016 you will definitely want to consider changing health insurance carriers. Some insurance carriers may even pull out of the market altogether. On the positive side if you have a group that has older employees or poor employee participation as a large group and the group is now rerated as a small group, the business will probably benefit as being rated as a small group and have better rates and choices in the small business market. Businesses with 50 or more full time equivalent employees will have to offer affordable health insurance plans to there employees or face large fines from the government. The system is set up as to make it more affordable to the businesses to offer affordable health insurance coverage to there employees then to pay the fines in almost all cases. As long as a business offers their employees a bronze level plan that wont cost the individual employee any more then 9.5% of the employees salary, the business is safe from paying fines. Bronze plans can start in the low $300 range per month in NY. So even a minimum wage employee working 30 hours per week can pay $100 per month towards the cost of the coverage and the business would pay the balance. In many instances the employee would rather go on Medicaid for free and the business would be off the hook for that employee. Any full time employee who earns less than $16,000 per year can go on a Medicaid plan in NY. Employees who earn more than $16,000 can afford to pay $127 per month towards the cost of a bronze plan and the business would have to pay the balance. So a business purchasing the least expensive compliant plan may only have to pay $200 per month for their lowest income employees, which is about the same cost as the penalty for not offering the insurance coverage. A business will probably find that their lowest income employees would rather go without insurance then pay the $127 per month to have a Bronze plan. So as long as the employee is offered the coverage and then declines it , the business is off the hook for the fine.