Pursuant to the Federal Affordable Care Act (ACA,) Marketplace Exchanges began operating in October 2013. States were given the option to set-up their own Marketplace or to allow the Federal government to set-up a Marketplace in their state. New York chose to offer its own Marketplace Exchange, called New York State of Health. On April 12, 2012, Governor Cuomo issued Executive Order #42 to establish it within the NYS Department of Health. On July 9, 2012 Governor Cuomo submitted a declaration letter to the Centers for Medicare & Medicaid Services confirming New York’s intent to establish a State-based Health Plan Marketplace consistent with the Affordable Care Act.
Did you know? New York State’s health insurance system is one of the country’s most progressive. Since 1990, New York State residents have benefited from community rating and guaranteed issue. These two regulations are key components of the Affordable Care Act, which became effective on March 23rd, 2010.
Two Exchanges on the New York State of Health Marketplace
The Employer SHOP- Small Business Health Options
NOTE: Carrier plans and provider networks offered on the Exchange are different than the plans offered off the Exchange (carrier-direct.)
The Individual Exchange Marketplace
NOTE: Open enrollment for 2014 ended on March 31st. Individuals and families can enroll in coverage after March 31st, if they have a Qualifying Event and qualify for the special enrollment period.
The Mandated 10 Essential Services
Every health insurance plan offered through New York State of Health is required to include coverage for medical services in the following 10 categories, in accordance with the Affordable Care Act legislation:
- Ambulatory patient services, doctor visits, and outpatient services
- Emergency services
- 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
Four Tiers or Levels of Insurance
- Platinum Tier – 90% of coverage with the least out-of-pocket cost to you.
- Gold Tier– 80% of coverage with increased out-of-pocket cost to you.
- Silver Tier – 70% of coverage with additional increased out-of-pocket cost to you.
- Bronze Tier – 60% of coverage with the highest out-of-pocket cost to you.
You have the option to choose from one of the four ‘metal’ tiers of health coverage. There are several plans from which to choose within each metal tier, each having a limit for out-of-pocket spending.
The premium cost for each metal tier varies, with Platinum being the most expensive and Bronze being the least expensive. In addition, you should consider your out-of-pocket costs which you pay through deductibles, co-pays, and coinsurance- Platinum plans have the least out-of-pocket costs to you, and Bronze plans have the highest.
The SHOP Exchange for Employers
New York small businesses with 50 or fewer employees will have access to the New York State’s Small Business Health Insurance Options Program (SHOP), the health insurance exchange created especially for small businesses. (Click on Employer Mandates.)
The federal government announced it would delay the opening of the Federal SHOP Exchanges until November 1st, 2014.
Tax Credit for Employers
Businesses with fewer than 25 employees paying average salaries of less than $50,000, who offer health insurance through the SHOP Exchange, will qualify for a tax credit. In 2014, the credit covers up to 50% of the cost of health insurance. However it will only be available to businesses that provide their employees coverage through the SHOP Exchange.
Businesses will also be able to claim a business expense deduction for the amount of premiums paid that exceed the tax credit. This means those businesses will receive a tax credit and a tax deduction. Businesses that do not qualify for the tax credit or continue to purchase their health insurance directly from the carrier, will be able to continue to claim the full amount of the employer’s expense as a business tax deduction.
The Individual Exchange
Every citizen and permanent United States resident is required to have health insurance or pay a penalty. The insurance can be obtained through your place of employment, your spouse’s workplace, the military, purchased on the New York State of Health Marketplace Exchange, through a government assistance program like Medicare or Medicaid, or Cobra- if you are a terminated employee who was enrolled in your employer’s plan.
The penalty for not having health insurance in 2014 is $95 for individuals or 1 percent of your income, whichever is greater. In 2015 the penalty increases to $325 or 2 percent of income, and in 2016 it will be $695 or 2.5 percent of your taxable income. After 2016, the penalty increase will be annually tied to the cost of living adjustment.
If your annual income falls somewhere between 100% – 400% of the Federal Poverty Line, then the cap on out-of-pocket expenses will be a lower, and you might qualify for a tax credit. (Click on Individual Mandate.)
More Information About the Affordable Care Act
www.hhs.gov/healthcare Department of Health & Human Services
www.cms.gov Centers for Medicare & Medicaid Services
www.sba.com Small Business Administration
www.dol.gov/ebsa/healthreform Department of Labor