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Rule Would Toughen Massachusetts Health Care Coverage Requirement

The current ‘fair share’ contribution regulation is part of the state’s 2006 health care reform law that created a nearly universal health system in Massachusetts.

August 14, 2008
Related Topics: Medical Benefits Law, Benefit Design and Communication, Future Workplace, Latest News
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Massachusetts Gov. Deval Patrick’s administration has issued a regulation that would tighten the rules employers in the state must meet to avoid paying an assessment to the state to help provide coverage to the uninsured.

The current “fair share” contribution regulation is part of the state’s 2006 health care reform law that created a nearly universal health system in Massachusetts. The current regulation requires businesses with at least 11 full-time employees to pay a penalty if they don’t fulfill one of two requirements.

To avoid paying the $295 per-employee assessment, employers must either ensure that at least 25 percent of their full-time workforce is enrolled in their group health insurance plans or they must pay 33 percent of the premium for individual coverage for employees within 90 days of their starting work.

The proposed regulation, however, would require employers to meet both requirements to avoid the assessment. If adopted, the assessments would generate an estimated $45 million in revenue in fiscal year 2009, according to documents from the Massachusetts Division of Health Care Finance and Policy. Currently, the assessments draw about $7 million in revenue, a spokeswoman from the governor’s office said.

That revenue goes toward funding the Commonwealth Care program, which subsidizes health insurance premiums for about 175,000 previously uninsured lower-income state residents.

Employer groups had previously expressed concerns about such a change in the rules, which they say will impose a hefty financial assessment on employers, such as many retailers, that have long waiting periods before new employees are eligible for health coverage. Under current rules, many such companies are exempt from the penalty.

The regulations would go into effect October 1. A public hearing on the issue is scheduled for September 5.

Filed by Kristin Gunderson Hunt of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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