A health-benefit exchange for New York State is back on the table, and it could change the insurance market for small businesses. But at this point, experts say it’s unclear exactly how. Gov. Andrew Cuomo included legislation in his 2012-13 proposed state budget that would set up a health-insurance exchange in New York. The exchange […]
A health-benefit exchange for New York State is back on the table, and it could change the insurance market for small businesses. But at this point, experts say it’s unclear exactly how.
Gov. Andrew Cuomo included legislation in his 2012-13 proposed state budget that would set up a health-insurance exchange in New York. The exchange would meet requirements in the Patient Protection and Affordable Care Act, the 2010 federal health-care reform law.
While it has yet to be approved by legislators, attorneys say small businesses may want to keep an eye on it — even if they don’t currently provide insurance to their workers.
“Most small employers are pretty excited about it and should be tuned in,” says Kathleen Centolella, a partner at Syracuse–based Green & Seifter, Attorneys, PLLC which specializes in employee benefits. “It gives them a one-stop shop to potentially provide insurance when they haven’t in the past.”
The legislation in the governor’s budget is similar to health-insurance exchange legislation that stalled in the legislature last year, Centolella says. It is also similar to guidelines set forth by the federal Department of Health and Human Services.
In theory, the exchange could take some of the administrative burdens away from small businesses offering health care, according to Centolella. It could make it easier for employers to pick a level of health-care insurance they are willing to provide and give employees the choice to enroll in a plan, she says.
That’s because in addition to setting up a market for individual health insurance, the exchange legislation calls for setting up a Small Business Health Options Program (SHOP) to help employers enroll their employees in the group-insurance market. The governor’s budget proposal estimates the exchange would be completely funded by the federal government, extend health coverage to more than 1 million uninsured state residents, and reduce the cost of small-business health insurance by 22 percent.
The proposed exchange would set up five-member regional advisory committees for New York City, metropolitan suburban, northern, central, and western regions in the state. That could help the exchange meet needs in different areas, Centolella says.
“The fact that we have regional boards I think is one of the most important, unique aspects of New York’s exchange,” she says. “Because the market is different downstate than it is here. And the population is different.”
However, Centolella points out that it is too soon to know exactly how the exchange would work. The legislation leaves many components to be worked out in the future, she says.
“The devil is in the details,” she says. “I’ll be curious to see once the actual technology is created how it works and how it looks. Like anything that’s IT driven, if it doesn’t work well, you lose a lot of potential users. The last thing they need is something that’s complicated.”
Her caution was shared by Jill Muratori, vice president and counsel at Albany–based Barrett Associates and legislative representative for the Independent Insurance Agents & Brokers of New York, Inc. (IIABNY). IIABNY, based in DeWitt, is a not-for profit trade association of independent insurance professionals.
The proposed exchange legislation lacks many details and leaves much to be determined, Muratori says.
“Currently the legislation sets up a basic framework for this exchange to get up and running,” she says. “There are a lot of things on the to-do list for the people who are going to be on the [exchange’s] board of directors.”
IIABNY is pleased that the exchange will not cut insurance agents and brokers out of the health-insurance market, according to Muratori. They could be appointed to the exchange’s nine-member board of directors or sit on its five regional councils, and brokers and agents will still be able help consumers find insurance, she says.
Federal law requires the exchange to be up and running by 2014, so Muratori expects the proposal to be passed in New York this year, so the state can be prepared.
“There are a whole bunch of deadlines,” she says. “I really think [legislators] have to do something this session.”