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Friday, 06 July 2018 12:32

Be Aware of the New York Hospital Surcharge

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If you have a self-funded or partially self-funded plan (including all “Level Funding” plans), you need to know about New York State’s Health Care Reform Act (HCRA) of 1996, even if you don’t have employees in New York. The HCRA, which still applies today, was created to generate funding for a wide variety of health care initiatives in the state, and requires providers of health care services and Third Party Administrators (TPAs) to participate in that funding. In 1997, the State created the New York Public Goods Pool to collect funds for those initiatives and for indigent care in the state. 

Under the HCRA, New York State imposes two additional costs related to health care services received in the state:

  • a tax on health care services received in the state ("the surcharge"), regardless of whether a claimant lives there or is just visiting

  • a monthly Covered Lives Assessment (CLA) assessed on all covered members of your group health plan that reside in the state of New York

The surcharge on health care services can be upwards of 60% of the claim cost, and is assessed when a covered member receives an applicable service in the state of New York (mostly hospital-related services). New York hospitals are required to collect the HCRA surcharge and to pay it to the New York State Department of Health. If the proper election forms are completed however, the surcharge is much lower.

Fully insured carrier plans should automatically be making the election and covering these assessments in their contracts, but there may be additional steps required for a self-funded plan. Your self-funded medical carrier or TPA will pay the surcharges to New York State directly on your behalf if you elect into the NYHCRA Public Goods Pool by completing the required paperwork, and they will also remit the CLA for any covered members residing in the state of New York.

It’s very important that all self-funded groups check this task off their list, because the process becomes much harder, and the surcharge much higher, if you don’t. As a self-funded group, you should check with your medical carrier or TPA  to confirm that your paperwork has been completed or is already included in your general contract with them.

It’s also important for anyone traveling to New York State to be aware of these additional fees. Finally, anyone without health insurance coverage will be assessed the surcharge at the time of claim.

If you’d like to know more about the HCRA, you can find more information here: https://www.health.ny.gov/regulations/hcra/ 

Read 388 times Last modified on Monday, 30 July 2018 15:10
Tonya Young

Tonya is our Senior Account Manager and brings eleven years of prior insurance company expertise to Fall River, having worked at Anthem Blue Cross and Great-West Healthcare (now part of CIGNA). Tonya holds a Bachelor of Science in Psychology from Texas A&M University. Originally from Minnesota, she loves the Colorado outdoors and enjoys family time with her young daughter.