SYRACUSE — Health Republic Insurance of New York (HRINY) will no longer offer individual and small-group health-insurance plans in 2016. HRINY is a consumer operated and oriented plan (CO-OP). CO-OPs are private, member-governed health-insurance companies that formed nationwide as part of the Affordable Care Act, or Obamacare. The CO-OP had hired POMCO Group, a Syracuse–based […]
SYRACUSE — Health Republic Insurance of New York (HRINY) will no longer offer individual and small-group health-insurance plans in 2016.
HRINY is a consumer operated and oriented plan (CO-OP). CO-OPs are private, member-governed health-insurance companies that formed nationwide as part of the Affordable Care Act, or Obamacare.
The CO-OP had hired POMCO Group, a Syracuse–based third-party administrator of self-funded health-care and risk-management plans, as its third-party administrator.
POMCO on July 1, 2014 announced it would add nearly 65 employees to its Syracuse headquarters by the end of that month. POMCO’s partnership with HRINY was the “largest factor” behind the firm’s need to recruit additional people, the Syracuse firm said in its news release at the time.
CNYBJ requested comment from POMCO Group on any impact the HRINY closure might have on its operations, but it didn’t respond before press time. As of Oct. 7, there were no notifications of job cuts filed by either POMCO or HRINY on the New York Department of Labor website in accordance with the Worker Adjustment and Retraining Notification (WARN) Act, which requires businesses of a certain size to give notice of layoffs and closings before they happen.
The HRINY CO-OP decided to close operations “after coordinating with state and federal regulators,” Debra Friedman, CEO of Health Republic, wrote in a letter posted at the nonprofit’s website.
“Starting a new insurance company is a daunting task in any environment, but the systemic challenges placed on us by the structure of the CO-OP program were simply too difficult to overcome,” wrote Friedman.
The Wall Street Journal on Sept. 25 reported that officials cited “likelihood that health cooperative would become financially insolvent” as the reason for shutting the organization down.
The publication cited regulatory filings that indicated the insurer lost about $52.7 million in the first six months of this year, on top of a $77.5 million loss in 2014.
The Centers for Medicare & Medicaid Services; New York’s state insurance exchange, known as New York State of Health; and the New York State Department of Financial Services (DFS) jointly made the decision to have HRINY close down its operation, The Wall Street Journal reported.
What’s next
HRINY members will be able to choose a new insurance provider for 2016 during the next open-enrollment period, which begins on Nov. 1, the letter said.
Existing Health Republic small group plans also currently remain in effect, the letter said.
DFS and New York State of Health will evaluate the best course of action with regard to small group plans.
“Any future determinations made on small group plans will be announced with appropriate notice to help provide a transition period to new coverage and protect policyholders,” according to the online letter.