Small Group Employers
As your constituent and as someone who relies on affordable health insurance, I urge you to enact a permanent definition for "small group employer" as being between 1-50 employees in New York State. Since 2015, New York State has allowed school districts, BOCES and other municipal groups to remain in their consortiums, however, on December 31, 2021, this extension will expire.
Prior to the passage of the federal Affordable Care Act (ACA), New York State law allowed employers with 50 or more eligible individuals to join together in various forms to purchase experience-rated health insurance coverage for their employees and participate in health insurance consortiums or trusts.
Upon passage of the ACA, each state was required to re-define a "small group employer" as an employer with 1-100 employees as opposed to the current definition of 1-50. In 2015, New York State changed its definition of a "small group employer" to conform with the provisions of the ACA. According to the law, among other restrictions, any employer falling below the 100 employee threshold would no longer have the ability to participate in an experience-rated health insurance plan (e.g., health insurance consortium or trust) and instead must participate in a community-rated plan. It is estimated that approximately 100 districts have between 51-100 members.
If districts are forced out of their health care consortiums, they will be forced into the small group market, which will significantly increase our health care costs. This change will not only affect districts with 51-100 members, but it will also impact all those districts that remain in the consortium as they will likely have to pay more due to the fact there are fewer members in the consortium.
A shift of this nature will be devastating to a school district's health insurance plans and benefits. Many school districts are already in the process of developing their 2021 budgets. All school districts are subject to the tax cap, which limits how much money they can generate. Accordingly, if school districts are forced out of their consortiums, the increased health care costs will be significantly more than they can raise pursuant to the property tax cap.
Furthermore, changes to employee health care benefits are subject to collective bargaining, so if districts can no longer participate in their consortiums, health care costs will increase, making the collective bargaining process more challenging and longer to complete.
Thank you for your consideration of this important matter. I respectfully ask that you bring up this issue with your conference and urge your leadership to provide a permanent solution to resolve this issue. I look forward to a reply to my letter.
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