What is the Difference Between a NY Small Business Health Insurance and a New York Individual Health Plan

When choosing health insurance in New York, it is important to understand the distinctions between several types of plans. Two common options are the NY Small Group health plan and the New York Individual health plan. So, what is the difference between the two?

Tax benefits and Subsidies

Businesses with less than 25 full time employees that buy a group plan may be eligible for the Small Business Health Care Tax Credit, which can cover up to 50% of the employer’s contribution to premiums, a significant tax-saving opportunity for the business. 

Individual health plans cannot be bought by businesses on behalf of employees. Individual health plans provide income-based subsidies, like the Advance Premium Tax Credit (APTC) and Cost-Sharing Reductions (CSR), to lower premiums and out-of-pocket costs. For low-income New Yorkers, the Essential Plan offers comprehensive coverage at zero premium and is only available to individuals.

Health Plan Options – New York small group health insurance plans often provide greater flexibility compared to individual health plans, including PPO plan options. This is ideal for businesses with employees who travel often, live in neighboring states, or prefer plans with more flexibility and larger networks of doctors and hospitals.

Premiums – Premiums for NY companies are often less than individual plans, in most cases this is because the group insurance plan is spread across a larger pool of insureds.

Eligibility – Plans are available to businesses with 1-100 employees, allowing them to provide health coverage to employees and dependents. Individual plans are only available to non-businesses.

 

How Does a Business Qualify for a New York Small Business Health Insurance Plan?

To qualify for business health insurance in New York, a business must meet specific criteria:

Location: The business must be physically based in New York State or have most of its employees working in the state to qualify for a New York-based group health insurance plan.

Number of Employees: A NY small health insurance group typically consists of a minimum 2, with up to 100 employees (though it can go down to 1) working 30 hours or more per week.

Legal Business Status – to prove legal business status, Health insurance carriers usually ask for an NYS-45 tax form which shows all the employees on your payroll. If it is a New NYS business, then the insurance company will often accept articles of incorporation along with employee pay stubs.

Employee residence status: If an employee is a new NYS resident, they may still be eligible for coverage if they provide proof of residency during the application process. Employees outside New York can still be covered if their plan supports an out-of-state network. It is best to check the plan thoroughly to see if your employees will be covered by your selected plan. Note that some plans do not cover employees outside New York, such as the Healthy NY health insurance.

Mandatory Offering of coverage – the NY Business must offer health insurance coverage to all Full-time employees working 30 or more hours per week. The company at its own discretion can choose to offer coverage to part time employees.

 

How Does a Small Company Qualify for Tax Credits When Setting Up a NY Small Business Health Insurance?

To qualify for the NYS Health Insurance tax credit. It must meet the following requirements:

Less than 25 Full-time Employees – even though NYS defines a small business as those who have 1 –100 employees. To qualify for Tax Credits, the company must have fewer than 25 Full Time employees.

Business Premiums Contribution – The business must contribute at least 50% of the employees’ health insurance premiums. The business does not have to contribute to dependents care health insurance premiums.

Purchase Through NYSOH – only New York State of Health sponsored plans are eligible for the health insurance tax credit.

Employees’ Salaries – Employees on average must earn less than $56.000 per year, otherwise the tax credit will be reduced.

Once a business has met those conditions, it may qualify for a tax credit of up to 50% of the premiums it has paid on behalf of its employees. Additionally, if the business is tax exempt, then it can qualify for up to 35% of the premiums.

Tax Credits are provided for up to a period of two consecutive years.

 

Where Does a Small Business Buy a Group Health Insurance Plan

 Small New York companies have several options for buying a plan:

Broker: A New York State insurance broker can help small business owners compare health insurance options from various carriers, offering professional guidance to find the best coverage based on the business’s needs and budget.

Direct from Insurance Company: Businesses can buy a plan directly from an insurance provider, though this option does not offer access to tax credits available through the NYSOH marketplace.

Business Associations: Some industry-specific or local business associations provide access to group health plans as a benefit to their members, often offering competitive rates.

New York State of Health (NYSOH): With the help of a broker, Businesses can buy a plan through New York’s official health insurance marketplace, which offers a range of coverage options and may qualify the business for tax credits.

 

Frequently Asked New York Small Business Health Insurance Questions

I just became a new NYS business owner, what documents do we need to present to the insurance company to qualify for group health insurance?

You will need to provide a copy of your Articles of Incorporation along with pays stubs for all employees. No other options are acceptable.

 

Can my non-New York employee who lives in another state be covered under my NY group health plan?

Employees outside of New York state can be covered if the business is in New York state, and the health plan allows coverage outside of New York. It is best to check the full benefits to confirm if they have out-of-state coverage.

 

Can I use my NY group health plan outside of NY?

Some plans, such as PPOs do provide access to a network doctors and hospitals outside of New York. It is best to check the benefits summary to ensure all your needs are covered.

 

Can I have more than one group health insurance New York plan simultaneously?

Yes, you can have more than one plan and more than one health insurance company at the same time. But take note, you need to indicate what other group plans your business has on your new group health insurance application. With multiple options, you’re allowing your employees to determine the right health insurance based on their needs.

 

We are starting a new business in NY State, and we have employees that have their own individual health insurance, do we need to cover them?

You need to offer group health insurance to all employees that are working 30 or more hours per week. It is up to them to keep their current coverage or waive their current plans and go with your group plan.

 

We are starting a new group health insurance New York plan, and we have employees that have their own individual health insurance, do we need to cover them?

You need to offer coverage to all full-time employees even if they already have health insurance coverage. It is up to them if they choose your health coverage or waive it and stick to their existing one.

As a business owner, i cannot afford the entire cost of a group health insurance policy.  Am i required to pay all of it. 

No, most small group plans are paid by both the employer and employee. To help offset the costs for your employees, you may want to consider setting up a health savings account. 

 

Some of our employees are on Medicaid, do we have to cover them?

As part of the requirement, the employer must have the intention of offering coverage to all full-time employees, regardless of their Medicaid eligibility.

 

Can we buy the NY essential plan for a group?

No. The New York Essential Plan is for individuals only.

 

Are we required to buy a NYS group health insurance from the NY Marketplace

No, you do not have to buy a New York State of Health marketplace plan. However, if you have under 25 full time employees earning less than $62,000 per year, then there is a tax savings advantage to buy a marketplace plan. Many insurance companies make non group marketplace plans available that can cost less and provide extensive benefits.

 

Does a New York small business health plan differ from other states?

New York small group health plans can be bought by businesses with 100 or fewer full-time employees, while other states only cover businesses with 50 full-time employees or less. New York also has community-rated premiums, meaning the premiums of the plans are based on the family structure of the applicant and his/her dependents. Other states calculate their premium based on the age of each person in the plan.

 

Is a short-term health plan an option?

Short term health insurance plans are not available for sale in New York State.

 

Are New York plans less or more expensive as compared to other states?

Health plans for small companies in New York are more expensive than those of other states because the plans’ regulations aim to have broader coverage in exchange for increased costs. New York’s community-rated premiums can potentially also play a factor in the higher cost of the premiums.

 

Is it mandatory for a NY employer to offer a health insurance plan to its employees?

For businesses with 50 and below Full-time employees, it is not mandatory to provide coverage. Businesses with 50- 100 Full-time employees must offer health insurance coverage to all employees working 30 or more hours per week, as required by the affordable care act.

 

Must we offer Part-time employees the option of participating in our NY Group health insurance plan?

No, the business is only required to offer it only to full-time employees working 30 or more hours per week.

 

I manage the Insurance for my company, how can i determine the health insurance needs of my employees?

Always consider the group as a whole, rather than the needs of a few, with the intent of offering the right health plan. However, since all health options in New York allow for pre-existing conditions, your best offering your employees more than one health plan option to choose from. Consider a three-tier approach that includes a low, medium and high health plan option which allows each option to select the plan and cost that best suit their needs.

 

In summary, small business health insurance plans offer a range of benefits tailored to businesses with 1-100 employees. These plans provide flexibility, tax credits, and comprehensive coverage options, making them an attractive choice for employers looking to support their employees’ health and well-being. By understanding the eligibility criteria and exploring various purchasing options, businesses can find the most suitable plan to meet their needs and budget. For personalized assistance in shopping and comparing options, contact us today at (888)215-4045