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Are
you ready for
Massachusetts
Health Care Reform?
The
goal of
The
INDIVIDUAL AND FAMILY
ISSUES:
As an individual, you are ultimately responsible to secure
creditable insurance coverage even if it is not available through your
employer. One penalty for not
having health insurance coverage is that individuals will lose their
personal income tax exemption on their 2007 MA Income Tax return, worth
$219 for an individual. Penalties
will increase in 2008.
Because
of the importance of this new law, most insurance carriers will have a
special open enrollment period beginning July 1.
Check with your HR department if you aren’t clear about your
insurance options. If you
don’t have health insurance and don’t have access through an employer,
we recommend that you contact the Commonwealth Health Connector.
The Health Connector’s website is www.MAhealthconnector.org.
BUSINESS
ISSUES:
Murphy
Insurance Agency can help your businesses provide group health insurance
for their employees. Our
associates who specialize in health insurance can help you find an
insurance provider, get connected with the right resources and simplify
the process as much as possible.
The
new law will affect businesses in different ways depending on their size.
In general, businesses with fewer than 11 employees are exempt from most
requirements of the law. However, their employees who live in
Beginning
later this summer, small employers who wish to contribute toward their
employees’ group health coverage can purchase health insurance through
the Health Connector, or they can purchase through existing channels.
Here
are key requirements of the new law that affect employers:
Section
125 Plans
Employers
do not have to allow their part-time employees or any other employee that
does not meet their normal eligibility guidelines to participate in their
health insurance program. However,
businesses with 11 or more full-time equivalent employees must offer Section 125 plans to enable their employees to purchase health
insurance on a pre-tax basis. Employers
must process payroll deductions for premium payments but they are not
required to make a contribution towards the cost of the coverage.
Those who do not will face a potential surcharge if their employees
(or dependents of their employees) made significant use of the state’s
Uncompensated Care Pool. This is called the Free
Rider Surcharge.
Employers
with 11 or more full-time equivalent employees are required to offer
employees a qualified health plan and make a fair and reasonable
contribution to it. Failure to do so will subject employers to a Fair
Share Assessment of up to $295 per employee, per year and/or sum of Fair
Share Employer Contribution and the per employee cost of un-reimbursed
physician care to be determined annually. There are two tests to determine
if an employer will be subject to this assessment. An
employer who satisfies either test will NOT be subject to the assessment.
Primary Test:
At least 25 percent of the employer’s full-time employees are enrolled
in the employer’s group health insurance; or
Secondary Test:
The employer offers to contribute at least 33 percent toward the cost of
an individual health plan for full-time employees who have been employed
more than 90 consecutive days in the year.
Health
Insurance Responsibility Disclosure (HIRD) Forms
To
demonstrate compliance with Section 125 and Fair Share requirements,
employers with 11 or more employees must file a Health Insurance
Responsibility Disclosure Form (HIRD) and must collect employee HIRD forms
as well. The employer’s HIRD form is to be filed annually with the state
Division of Health Care Finance and Policy. The employee forms are to be
collected by the employer and maintained for a period of three years for
those employees who refuse the employer’s insurance offering or Section
125 plan.
Non
Discrimination Provision
Another
provision requires insurance carriers to sell licensed health insurance
products only to employers who offer insurance to all full-time employees
and who do not require higher premium contribution from lower wage,
full-time employees than they do from higher wage, full-time employees.
For
more information, including an Employer Handbook and answers to frequently
asked questions, please visit the Health Connector’s website at www.MAhealthconnector.org.
Employers may also e-mail questions to the Health Connector’s Public
Information Unit at Connector@state.ma.us.
Contact
our Group Health Insurance Team:
Pauline
Correia – pcorreia@dfmurphy.com
Bonnie
Donovan – bdonovan@dfmurphy.com
Source:
Commonwealth Health Insurance Connector Authority
100
City Hall Plaza,
