New York State employers may need to cover more employees on their health plans effective 1/1/26
- Katie Barone
- Jul 24
- 2 min read
Originally published by Andrew F. Biernat, GBDS, CWCA, MCRA Strategic Advisor
In the past four years, many New Yorkers have benefited from federal and state subsidized health care programs, electing not to participate in employer sponsored coverage because less expensive or even free options were available to them through Medicaid, the Essential Plan and the New York State of health marketplace subsidies. But soon many of those individuals may have no choice but re-examine employer sponsored coverage.
Signed July 4th, 2025, the One Big Beautiful Bill is projected to impact healthcare in New York State for people on Medicaid, the Essential Plan, and those that receive marketplace subsidies. Here are some of the ways the impact will manifest:
Essential Plan & ACA subsidy restrictions Premium tax credit eligibility is narrowed for non‑naturalized immigrants, phasing out coverage for ~730,000 Essential Plan enrollees (mostly immigrants), including ~500,000 who will rely on state-only Medicaid and ~225,000 who will become uninsured (also effective 1/1/26 the NYS Department of Health announced they will no longer allow New York State licensed agents and brokers to receive compensation from insurance carriers who sell the Essential Plan. This will impact enrollment and service on these plans and remove a vital and trusted resource/advocate for those who might still qualify)
Medicaid work & paperwork mandates Able-bodied adults (19–64) must complete 80 hours/month of work, volunteering, or education to maintain Medicaid. New York expects ~1.2 million non-disabled adults—over half of its adult Medicaid caseload—to be dropped, potentially eliminating coverage for ~1.5 million New Yorkers.
Loss of federal Medicaid funding The bill slashes federal Medicaid aid by ~$8 billion in NY, forcing provider cuts. Safety‑net hospitals face up to $8 billion in reduced payments and 34,000+ lost jobs statewide.
Provider tax caps Medicaid financing through provider taxes is capped at 3.5% (down from 6%), reducing state funding flexibility. NY may lose ~$1.4 billion in Essential Plan hospital reimbursements annually.
Marketplace enrollment & subsidy hurdles The ACA exchange faces tighter income verification and eligibility checks, making re-enrollment harder and risking coverage for millions of subsidy-dependent New Yorkers .
These are very big changes to the current system, so make sure your organizations 2026 Reward, Recruit, Retain & Retire employee benefits strategy takes this into account. Failing to plan, is planning to fail.
About MCRA Strategic Advisory Board
MCRA Strategic Advisors are Managed Care leaders and Health Plan executives who advise MCRA Members, drive Member discussions, and share insights on industry challenges.
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