Employers not Included in Funding Boost for MA Health Care Program

August 4, 2008 (PLANSPONSOR.com) - Legislation to boost funding for Massachusetts new state-subsidized health care program gained final approval from lawmakers.

Business Insurance reports that, for now, employers are not being asked to make bigger contributions to the program. The legislation, which now goes to Governor Deval Patrick for approval, requires assessments of $33 million on health insurers and $20 million on hospitals and the diversion of $35 million from an employer-paid fund that pays health insurance premiums for the unemployed.

The legislation also specifies that revenue from a cigarette tax increase of one dollar per pack will go toward health care funding.

Under the current program, an employer is exempt from the annual $295 per employee assessment if at least 25% of full-time employees are enrolled in its group health insurance plans or if it pays at least 33% of the premium for individual coverage for employees within 90 days of their starting work, the news report explained. The state reported last November that the assessment was not bringing in enough funding for its Commonwealth Care program as it anticipated (See MA Health Care Penalty Falls Short of Expectations ).

Patrick had proposed that legislators give a state agency authority to raise the $295 assessment to a level it projected would meet its funding target, but the state House and Senate declined to include the proposal in the budget legislation. An increase in the employer assessment was also considered by the Commonwealth Care board of directors earlier this year (See MA Health Care Board Pondering Employer Payment Hikes ).