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Final vote phases out Massachusetts' state health insurance mandate

Posted On: Aug. 18, 2014 12:00 AM CST

Final vote phases out Massachusetts' state health insurance mandate

A Massachusetts health reform law board Thursday unanimously voted to repeal for a second and final time rules relating to a landmark state statute that required employers to either offer health care coverage to their employees or pay a fine.

That vote by the board of directors of the Massachusetts Health Connector, which regulates key provisions of the state's 2006 health reform law, brings to a final end a provision in that law that required employers with at least 11 full-time employees to either offer coverage or pay an annual $295-per-employee fine. The board had tentatively approved repeal in a preliminary vote in June.

The catalyst for the board action was legislation Massachusetts lawmakers passed last year that formally repealed the mandate, known as the Employer Fair Share Contribution program.

“Given the repeal of the underlying statutes, the Health Connector's accompanying regulations no longer have legal force,” stated a background paper prepared for the Health Connector directors prior to a preliminary vote in June in which the directors unanimously approved repealing the regulations.

While the Massachusetts mandate is now history, employers, starting next year, will — under the Patient Protection and Affordable Care Act and subsequent regulations — face a federal health care coverage mandate.

In 2015, employers with at least 100 full-time employees will have to offer coverage to at least 70% of their full-time employees or pay an annual $2,000-per-employee penalty. In calculating the penalty, an employer can exclude 80 of its full-time employees in 2015.

Then in 2016, the mandate will apply to employers with at least 50 full-time employees, with the 80-employee exclusion in calculating the penalty for not offering coverage permanently dropping to 30 employees.