Although the botched Affordable Care Act (ACA) rollout is shaping up nationally as a political and bureaucratic disaster, the Cuomo administration is warning New York health insurance agents and brokers not to try to get around the new Obamacare requirements for small group health plans here. *See postscript below.
Yesterday, the state’s main insurance regulatory agency posted this notice on its website:
The Department of Financial Services is concerned that certain small employer groups may have elected to renew health insurance coverage in 2013 that would otherwise not renew until 2014 in order to avoid the requirements of the Affordable Care Act (ACA) that take effect on January 1, 2014. Health insurance producers are hereby reminded that … insurers and insurance producers are not permitted to renew a small group policy which provides hospital, surgical or medical expense coverage that renews on or after January 1, 2014, but before July 1, 2014, prior to the policy’s annual renewal date for the sole purpose of evading the requirements of the ACA and regulations promulgated thereunder. Health insurance producers that steer small employer groups toward early renewal of coverage for the sole purpose of avoiding the requirements of the ACA may be in violation of the Insurance Law. Likewise, insurers who early renew coverage for small groups for the sole purpose of avoiding the requirements of the ACA may also be in violation of the Insurance Law. An isolated, inadvertent renewal date change that was not made for the sole purpose of evading the requirements of the ACA shall not be deemed a violation.
In other words, don’t even think about trying to minimize Obamacare’s impact.
The DFS has the authority to issue this warning under little-noticed Article 7 bill provisions enacted with the 2012-13 state budget:
New York’s historically heavy-handed regulatory approach health insurance, complete with a wide array of minimum mandated coverage levels, community rating and guaranteed-issue rules, has made us one of the few states where the cheapest available Obamacare plan will be less expensive than those available now. But apples-to-apples comparisons are difficult, since the ACA plans generally have different benefits, provider networks and deductibility levels than plans likeHealthy NY.
* A reader has inquired about penalties for violation of the law. Based on this, it would appear that brokers and agents arranging to renew a small group health insurance policy for the sole purpose of evading the new ACA requirements could be liable for a fine of $1,000 per policy found to have been issued in violation of the law.