Circular Letter No. 18 (1996)

December 20, 1996


All Insurers Licensed to Write Accident and Health Insurance in New York State and all Health Maintenance Organization (HMOs)


New York State Small Business Health Insurance Partnership Program (NYSHIPP)

The New York Health Care Reform Act of 1996 added a new Article 9-A to the Public Health Law establishing NYSHIPP. NYSHIPP is a program designed to assist small businesses to purchase health insurance coverage for their employees and dependents through subsidization of the premium rate. The program will be administered by the Bureau of Health Economics of the New York State Department of Health. This Circular Letter is to remind you of the requirements of Article 9-A.

A small business for purposes of NYSHIPP is a sole proprietor or an employer of up to fifty employees. The employer applies to the Department of Health for a determination as to whether that employer is eligible for a premium subsidy. All insurers and HMOs offering coverage in the small group insurance market must make their approved small group policies available to employers eligible under NYSHIPP, including sole proprietors and groups of two.

As part of the application process established by the Department of Health, an employer seeking a subsidy under NYSHIPP will contact the insurer or HMO of its choice to purchase coverage. In order for the Department of Health to determine whether the coverage sought qualifies for a subsidy, the insurer or HMO should provide the employer with a summary of the benefits under the policy selected and a premium rate quote. The employer incorporates this information with its application to the Department of Health.

If that Department determines that the employer is eligible for the NYSHIPP program, a "partnership certificate" will be issued to the employer stating the amount of the subsidy. The certificate will then be given to the insurer or HMO issuing coverage to the employer. Under NYSHIPP, up to forty five percent of the premium for a comprehensive policy is eligible for a subsidy. No subsidy is available toward the cost of coverage provided by optional rider.

The insurer or HMO must arrange for payment of the employer's share of the premium rate for the policy. Article 9-A requires the Department of Health to establish the procedure for redeeming the partnership certificates for the remainder of the premium.

Any questions regarding NYSHIPP may be directed to Deborah Kozemko of this Department at (518) 474-4098 or Virginia Dolins of the Bureau of Health Economics of the Department of Health at (518) 473-7883.

Very truly yours,

Fredric L. Bodner, JD
Assistant Deputy Superintendent and
Chief, Life & Health Bureau