Empire Leaving Small Group – delayed 1 year

Empire Leaving Small Group – delayed 1 year

In a pleasant surprise, Empire will delay their April 2012 decision to “simplify” small group plans 1 more year from April 2012 to April 2013 instead.  The Nov 4th Empire announcement to leave  the NY Small Group Business was truly shocking after being in business for 75 years and insuring 35% of the  market.

What this means for consumers is that insured members will now breath a sigh of relief and keep their contracted plan at least until their renewal. Evidentially, Empire was allowed to abruptly  do a “hard shut down of  their plans”  for April and not allow a group to complete their 12 month contract.  The negative  consequence would have affected many unfairly as most members today have some kind of annual deductible and/or coinsurance on Rx plans, hospitalizations and surgeries.  Example: a member signs up for a plan Oct 1 and has already met their deductible responsibilities would suddenly  have to now change plans on April 2012. and start all over again.

A point needing further explanation is are they or they not exiting?  Empire is stating that they are not in fact leaving but merely simplifying their offering to 6 plans but this is actually a red herring as the plans offered are not market friendly and allows Empire to stay within the market without having to really exit. Example:  Their HMO monthly rate is $675/single when you can get the same plan from a leading competitor for $465/single.

So why be in the market without actually being in the market?  The state’s regulation would not permit an insurer to re-enter for 3 years.  With Health Care Reform changes in the subsequent years there are variables that may help NYS  such as add’l federal funding.  Additionally, it is an election year and with many unknown Health Care Reform variables still evolving such as Supreme Court hearing on individual mandate by June 2012 –  WSJ Supreme Test for Health Law.

Either way this is welcome news to our existing clients and for the marketplace at large however short term it is.

Happy Holidays!!

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