Mass Health Care Reform

In 2006 Massachusetts Governor Mitt Romney signed the first-in-the-nation Health Care Reform Laws designed to help provide access to affordable health care for every citizen in the state. At the heart of this legislation is the concept of shared responsibility -- the costs and responsibilities to make affordable health coverage available to all would be shared by government, business and health care communities, individuals and insurers. The goal is to insure the estimated 4% of Massachusetts residents currently uninsured.

Individual Responsibility

To assure that everyone participates in the program, penalties have been established for non-compliance. The penalty for non-compliance for individuals is determined using the least expensive health plan within the employee's zip code offered by the independent state agency, called the Connector. The penalty is 50% of the premium of the least expensive plan charged for every month the individual goes without insurance. For example, if an individual plan is $300 then the individual will be penalized $150 per month for every month they are not insured. This penalty will remain in place for subsequent years. Penalties may increase each year by trend.

Employer Responsibility

Employers have certain responsibilities under the new law. They include:

• Fair Share Assessment Each employer with eleven or more employees or full-time equivalents (FTEs) must pass one of the following two tests:
  • Starting in 2009
    If you have less than 50 employees you must meet one of the following Fair Share Tests
  • If you have more than 50 employees you must meet both parts of the Fair Share Tests
  • 25% of all FTEs must participate in the group health plan
  • Employer must contribute at least 33% of premiums offered within 90 days of employment
• Free Rider Surcharge Employers with 11+ FTEs must offer a Section 125 Plan (Premium Only Plan) to employees. The plan document must allow for premium contributions for employees that go directly to the connector for their health insurance.
  For any employer currently offering a Section 125 Plan they must amend it as follows:
  • Expand current plan to include PT employees
  • If current plan documents eligibility is 90 days, amend for 60 days.

It is still being determined whether employers will be required to submit a copy of their plan document to the state. Currently, we’re advising the plan document and enrollment forms be kept on file by all employers until the state sets regulations for whereto send them.

Health Insurance Responsibility Disclosure Forms (HIRD)

These forms are state waiver forms and must be completed by each employee that waives the group health plan (within 15 days of employment). These forms must be kept on file by the employer for three years.

Steps for Employers to Comply with Mandates

1. Communicate the information to your employees regarding their responsibilities under the new laws.
2. Update 125 Plan Document or implement one
3. Have employees complete HIRD forms if waiving coverage
4. Complete census for those employees that will be accessing health insurance via the connector
5. Complete employer application with the connector so only one premium statement will be generated to you for all enrolled employees
6. Notify your payroll company of the Section 125 premium deductions for each employee
7. Employer obligation regarding the Connector Plans is to remit only premiums deducted from employees. The plans are portable so if an employee terminates only submit what has been deducted. The connector will make arrangements directly with the termed employees

New FSC and HIRD form filings

Employers with eleven or more FTEs must file electronically with the DUA each year by November 15th.

DUA Online Filings must be completed quarterly starting in January of 2009.

Additional Forms

Cobra Employer Handbook (PDF)

Census Data Form (DOC)

To find out more, call 978-534-3005 or email us.

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