It’s time to help midsize nonprofits afford health insurance

When the Affordable Care Act changed the definition of “large group employers” from “51 employees or more” to “100 employees or more” for insurance purposes, most states pushed back, recognizing that this change would negatively impact midsize employers with 51 to 100 employees. As a result, the law was amended in 2015, allowing states to define a large group as 51 or more employees. Forty-six states adjusted their definitions accordingly. New York did not.

New York’s failure to act has wreaked havoc on nonprofit organizations and small businesses in the 51 to 100 employee bracket. In moving from the large group to small group insurance market, many nonprofits were faced with double-digit premium increases. One agency found that its premium for a similar small group plan would increase by 53 percent – equal to the salaries of five professional staff. To afford health care for their workers, these employers generally have had no choice but to select plans with high deductibles, higher co-payments and higher co-insurance. In most cases, all or part of these additional costs are passed on to their employees.

Large group plans generally cost less because rates are determined by analyzing the group’s demographics, claims history and the likelihood of future medical needs. For small groups, insurance becomes more expensive because insurers look at the demographics and health characteristics of an entire geographic region, which is likely to include people who are older and have more serious health care needs.

Expecting that New York State would re-define large groups as 51 or more employees, many nonprofits and small businesses with 51 to 100 employees renewed their large group plans in December 2015 and were grandfathered in as large groups for most of 2016, keeping their health insurance costs in check. As of December 2016, however, they will be forced back into the small group market. The Senate passed a bill redefining large groups as 51 or more employees in its last session, but the Assembly failed to act on it. The bills will be re-introduced in the upcoming session.

So why is New York State lagging behind the rest of the country in re-defining large groups as 51 or more employees? The insurance industry is not opposed to the change. Some lawmakers argue that defining small employers as 1 to 100 is beneficial because it would enlarge the small group insurance market making it more capable of spreading risk and potentially lowering premiums. While possible in theory, in practice it has only placed an unsustainable burden on nonprofits and small businesses. Some employers in the 51 to 100 bracket are opting to join a Professional Employer Organization (PEO), which allows them to purchase health insurance at more competitive large group rates. Others find that the fees charged by PEOs undercut health insurance savings and involve too great a loss of autonomy. Some believe that PEOs target the healthiest customers to maximize profit, further destabilizing the small group market.

More than 600,000 employees in New York State work for nonprofits or small businesses that fall into the 51 to100 employee bracket. New York’s failure to amend the definition of large group places a heavy financial burden on employers who are trying to do right by these employees. If employers cannot shoulder increased premiums – and most cannot – employees bear the burden through higher out-of-pocket costs. For those who earn modest salaries in nonprofit social service organizations, a $2,000 a year deductible and high prescription co-pay can cause avoidance of medical care when it’s needed. They simply may not be able to afford to use the insurance they have. Restoring the large group definition to 51 or more employees will help these workers afford care when they need it and help nonprofits and small businesses operate in the black. For employers who assume the entire cost of health insurance, increased costs will come at the expense of program.

The Nonprofit Coordinating Committee of New York, which represents some 1,400 nonprofits in the greater New York area, is supporting efforts to re-define large groups as 51 or more employees. Nonprofits interested in getting involved should contact tjayasinghe@npccny.org.

 

Jeanette Zelhof is Executive Director of MFY Legal Services, Inc., a nonprofit that provides free civil legal services to low-income New Yorkers in the areas of housing, foreclosure, public benefits, civil and disability rights, consumer, employment, immigration and kinship care, handling more than 10,000 cases each year.

NEXT STORY: Safe harbor for New Yorkers

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.