Health Care Regulations

As implementation of the recently enacted health care reform law (Chapter 58 of the 2006 session) moves forward, the Division of Health Care Finance and Policy (DHCFP) is establishing regulations affecting the employer community in Massachusetts.

In early September DHCFP finalized one of the three regulations affecting the employer responsibility component of the law, namely the “fair share” assessment. Effective October 1, 2006 companies with 11 or more full-time equivalent employees (FTE – working 35 hours per week – PLEASE NOTE this definition for FTE currently only applies to this specific regulation) will meet the “fair and reasonable” test if at least 25 percent of those employees are enrolled in that business’s group health plan and the company is making a contribution toward it. A business that fails that test may still be deemed to offer a “fair and reasonable” contribution if the company offers to pay at least 33 percent of an individual’s health insurance premium.

Those firms that meet neither standard will be subjected to a $295 per FTE assessment mandated by the legislature. Employee leasing companies will be responsible for calculating and remitting the fair share assessment on behalf of their client companies. Seasonal employees who work for an employer more than sixteen weeks during the year are considered full-time employees and temporary employees who work for an employer for 12 consecutive weeks during the year are considered full-time employees. Please keep in mind that employers with 10 or fewer employees are not subject to this regulation.

Two additional regulations involve an employer surcharge for state-funded health costs and health insurance responsibility disclosure (HIRD). DHCFP postponed adopting the regulations that define the free rider surcharge on companies whose employees and dependents receive health services through the uncompensated care pool. And DHCFP is temporarily withdrawing a proposal for the third regulation that would require employers to file information about the health insurance status of each of its employees. Decisions are expected before the end of the calendar year.

Chapter 58 of the 2006 session laws mandates that employers (with 11 or more employees) offer to contribute toward or arrange for the purchase of health insurance for their employees. This requirement can be satisfied by employer-sponsored health insurance or by establishing an Internal Revenue Service Code Section 125 plan, also known as a “cafeteria” plan; no contribution is required for the Section 125 plan to avoid the “free rider” surcharge.

The HIRD requirement may prove administratively burdensome on employers, however improvements to the proposed regulation have already been made through a technical corrections bill passed by both Chambers on October 19th and signed by the Governor on October 26th, changes included exempting companies with 10 or fewer employees. Massachusetts employers with 11 or more employees will be required to file an Initial HIRD Form with information on whether the employer has offered to pay for or arrange for the purchase of health insurance; whether the employee has accepted or declined such coverage; if accepted, the type of coverage chosen; and whether the employee has an alternate source of coverage. The Chamber has submitted written and verbal testimony asking for, among other things, employers with 10 or fewer employees to be exempt for HIRD filing requirements, which was recently granted in the technical corrections bill mentioned above. Copies of the letter were also provided to members of our delegation along with requests that they consider this idea and promote it to their fellow legislators. See the link below.

Chamber staff attended hearings on the proposed regulations on August 8th and 15th to represent the concerns of businesses and reiterate the negative effects of over burdensome business mandates on the Massachusetts economy. Additional details on the regulations can be found on the DHCFP website accessed through www.mass.gov

To read the following please click: “HIRD Testimony" and “Health Care Testimony"

From the Division of Health Care Finance and Policy below is a bulletin for employers, which provides updates on the Health Care Law Regulations affecting Massachusetts employers. If you have any questions please contact Jessica at (978) 353-7600 x241. Click here to view "Bulletin for Employers".

For more answers to Frequently Asked Questions visit the Commonwealth Connector website.