MA Officials to Clarify Amount Expected from Employers for Health Care

June 29, 2006 (PLANSPONSOR.com) - Massachusetts state officials are expected to decide this week the minimum amount employers must pay toward employee health care in order to avoid a $295 per participant fee mandated in the state's recent health care legislation.

A health care bill passed in April requires businesses with more than 10 employees to contribute a “fair and reasonable” amount to workers’ health insurance or pay $295 a year per employee. Governor Mitt Romney vetoed the $295 assessment, but his vetoes were overriden in the House (See MA House Overrides Vetoes of Health Care Bill ) and Senate (See Mass. Senate Votes To Fine Employers Not Providing Health Insurance ).

The state’s Division of Health Care Finance and Policy is expected to issue regulation defining “fair and reasonable,” the Boston Globe reports. In public testimony, written comments, and interviews, some of the state’s most powerful business leaders and trade group officials said any company contribution toward employee health care should exempt the employer from paying the fee.

However, health care reform supporters said that definition could undercut the goal of the new law, providing health care coverage to about 460,000 Massachusetts residents who lack coverage. Brian Rosman, Policy Director at Health Care for All, a Boston advocacy group, said in the news report, “You don’t want an employer who makes a minimal contribution to get off scot-free. It’s just not what those words mean.”

The state says the $295 assessment will raise about $48 million for its free-care pool from companies whose uninsured workers are among the primary users of free care.

In addition to clarifying the term “fair and reasonable,” the division will clarify two other components of the health care reform:

  • Employers with more than 10 workers will be expected to form plans that enable workers to pay for health care premiums with pretax dollars. Companies that do not offer the plans, and whose employees use more than $50,000 in free care, will be responsible for 10% to 100% of free care. The division will set the precise percentage.
  • Regulators will also set rules requiring employers to collect information about individual employees’ health care coverage so they can enforce the reform law.

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