Mass. Unveils Proposed Employer Exemption from Health Mandate

By | July 6, 2006

Massachusetts officials have unveiled proposed regulations that would set the minimum a company would have to do to be exempt from a new $295 per-worker assessment as part of the state’s new health care law.

Health care advocates immediately criticized the regulations as setting too low a bar for businesses.

The law established the fee to encourage businesses to provide insurance plans for their workers. Any company with 11 or more workers that provides a “fair and reasonable” contribution to their workers’ health care would be exempt.

What the law didn’t do is say what “fair and reasonable” meant.

Under the proposed regulations, companies could meet that threshold if at least a quarter of their full-time employees are enrolled in the company’s group health plan. That doesn’t include workers who get insurance through their spouses or other sources.

Businesses that don’t meet that goal could still be exempt from the assessment if they contribute 33 percent of the cost of an individual’s health care premium. That provision is meant to cover companies where not enough workers opt into the health care plan to meet the 25 percent goal.

John McDonough, executive director of Health Care For All, said the regulations let employers off the hook too easily by not requiring family members be covered and allowing employers to make no contribution to premiums if 25 percent or more of their workers sign up.

“The proposed regulation is not fair and not reasonable,” McDonough said. “The proposed regulation does not give employers an incentive to make a significant contribution to their employees’ health coverage, or any incentive to provide coverage to part-time, seasonal or contract employees.”

Health and Human Services Secretary Timothy Murphy said the goal was to “respect legislative intent, minimize unnecessary paperwork and reporting requirements on employers and limit state government’s intrusion on the employer and employee compensation and benefit relationship.”

A second set of proposed regulations would apply to employers whose workers end up using the state’s free care pool.

The surcharges would range from 10 percent to 100 percent of the state’s cost of treating the worker using a formula taking into account the size of the company and frequency of claims. The surcharge would only apply to employers who don’t contribute to, or arrange for their workers to have access to, insurance.

A third set of regulations would require employers who don’t file information with the state about the health insurance status of their workers to sign a form acknowledging his or her responsibility for medical care.

The regulations, proposed by the state Division of Health Care Finance and Policy, are expected to be completed by early September after a public hearing.

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