BOSTON—Nearly all Massachusetts employers that are required by law to either offer health care coverage meeting certain standards or pay a penalty chose to provide coverage in fiscal year 2008.
Under a “play-or-pay” provision in the 2006 law intended to move Massachusetts close to universal coverage, employers with at least 11 employees must make a “fair and reasonable” contribution toward health care coverage. For the fiscal year that ended Sept. 30, 2008, that contribution requirement was met if at least 25% of an employer’s full-time employees were enrolled in a health care plan or if the employer paid at least 33% of the premium for individual coverage within 90 days of an employee starting work.
Employers not meeting those requirements are liable for an annual $295 per employee assessment.
In fiscal 2008, according to the Tuesday report by the Massachusetts Division of Health Care Finance and Policy, 97% of employers provided the required coverage, up from 96% in fiscal 2007.
The state collected $7.1 million from the 758 employers not meeting the fair share requirements in fiscal 2008, down from $10.4 million paid by 1,020 employers in fiscal 2007.
The biggest employers were most likely to have met the fair share requirements. For example, 98.6% of employers with 501 to 1,000 employees and 99.7% of employers with at least 1,001 employees met the requirements in fiscal 2008. By contrast, 93.8% of employers with 11 to 25 employees and 96.9% of employers with 26 to 50 employees met the requirements.
Stiffer rules that were finalized last year and went into effect Jan. 1 generally require employers with at least 51 employees to pass the 25% coverage and 33% premium tests. Those not meeting the 33% test are exempt from the $295 penalty—under a safe harbor provision—as long as at least 75% of their full-time employees are enrolled in their health care plans.
The stiffer fair share requirements, results of which are not yet known, are intended to boost revenues, which are used to help provide health insurance premium subsidies for eligible low-income uninsured state residents.
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