Community Rating Plans
If you are a small business owner who is trying to provide health insurance benefits to your employees in New York, then NY’s community rating is likely something you have dealt with before. The well-meaning rule, set in place under the Affordable Care Act, is designed to make it easier for the older worker and those with chronic health conditions find health care coverage they can afford.   Before community rating was around, workers with pre-existing conditions and workers over 60 had a hard time getting coverage that was both comprehensive and affordable. When the Affordable Care Act promised to open doors to health care coverage for those in most need of it, naturally everyone cheered, citing better healthcare for all. And this was not a false hope. Many are now enjoying new found doctors and treatments they never had access to before, at least not without paying for it on their own.  

So Why Is Community Rating Impacting Small Businesses in New York?

It’s great that people can get the coverage they need no matter what age they are or what ailments they have, right? What does that have to do with small business owners?   Under the rule in New York, as of today, any small business with under 50 employees needed to get their health insurance through a community rating pool, instead of on their own. Small business owners were are not allowed to purchase health insurance for their employees outside of this pool.   Some might find that rather restricting. Why does a business have to be subjected to a government determined list of health insurance providers? The reasoning is actually noble in nature, even if some do not agree with its implementation.   What a community rating pool does is it provides a way for everyone in the pool to pay the same amount for their health insurance, regardless of age, company size or amount of workers with pre-existing and/or chronic health conditions. Because everyone pays the same, that means everyone in the pool bears the burden of paying for those who use their benefits more than others.   There are no favorites in community rating pools. Everyone is the same, those who use tobacco products used to pay more, now they pay whatever anyone else does in the pool. Whether or not you think that is a good thing is irrelevant.   Small businesses that grew to over 50 employees found themselves in the unique position of being too big to be in the community rating pool. They were then able to procure health insurance on their own. If they were glad to shed the community rating then it was a good day when they needed to make a switch.  

NY’s Community Rating Will Soon Include Small Businesses Up To 100 Employees

  For small business owners over 50 employees who were glad to grow out of the community rating pool, they will be disappointed to know they will be right back in it again if they are under 100 employees. New York has decided to expand its community rating pool to include businesses under 100 employees.   This is arguably a decision that some will not be happy with. When you are happy with what is working, it is hard to find out that you have to do it a different way in order to satisfy someone else’s idea of what is fair. Many small business owners will be getting this news in just a few short months.  

What You Can Do If You Will Be Affected By NY’s Community Rating Rules

  If you are a small business owner who is facing the impending effects of this new rule expansion, there is something you can do to get excellent health care coverage for your employees at a reasonable cost. Last time NY’s community rating became an issue many small business owners sought shelter in a PEO service.   PEO services help small business owners provide excellent benefits within a reasonable cost because the costs are shared by thousands of employees across the United States. PEOs are also able to offer many of the benefits that neither community rating pools nor small businesses can offer on their own, such as retirement plans and employee perks that are usually financially out of reach.   With the ACA now affecting small business owners in NY more than ever before, looking at a PEO service as a solution, or perhaps revisiting the idea of working with a PEO is the right way to go. Changing times in New York do not have to negatively impact your business and your staff. A little research on PEOs and working with a PEO broker who can help you negotiate with the right one could be the best move you ever made toward offering the competitive benefits that talented employees deserve and at a rate your business can afford.  

If you’d like to find out more about how PEOs can help you provide great benefits and payroll management at less than you are paying now, contact us today for a free consultation.

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