March 03, 2020
New York recently posted the 2020 covered-lives assessment (CLA) rates for professional education under the Health Care Reform Act (HCRA). These rates are applicable to health claim payers – including self-insured plans – that elect to pay the assessment directly to the state rather than facing higher surcharges for in-state hospital expenses. The annual amount owed by the payer is calculated based upon the number of covered individuals and families residing in New York.
As background, following New York’s deregulation of hospital fees in 1996, the HCRA was enacted to provide financial assistance to hospitals through special taxes on health plans and medical services. The CLA assessments are intended to support the funding of graduate medical education. The CLA rates (or alternative surcharges) vary by state region. Accordingly, the applicable charge is based upon where the covered individual resides or receives in-state care.
The CLA assessment is in addition to the indigent care surcharge on services at state hospitals, diagnostic and treatment centers and free-standing clinical laboratories. The indigent care surcharge is payable regardless of the residency of the covered individual or group health plan sponsor. The current rate, which remains in effect through December 31, 2020, is 9.63% for payers electing to pay the amount directly to the state Public Good Pool and 28.27% for non-electing payers that pay the surcharge to healthcare providers.
Accordingly, group health plan sponsors should be aware of the 2020 rates and surcharges. In some cases, electing plans may have already been notified of the 2020 amounts through the state’s Office of Health Insurance Programs. Employers may want to consult with their insurers or third party administrators regarding any related administrative concerns. The specific assessment amounts and surcharges by region are available at the below link.
2020 CLA Rates »