FOR IMMEDIATE RELEASE: September 8, 2006

CONTACT: Dick Powers 617-573-1610 Brigitte Walsh 617-573-1612

FORMULA SET FOR 'FAIR SHARE' ASSESSMENT
No Decision on 'Free Rider' Surcharge or Disclosure Forms

After several public hearings held in August as well as regional consultative sessions earlier this summer, the Division of Health Care Finance and Policy (DHCFP) today approved a regulation that establishes clear standards for determining whether employers are making “fair and reasonable” contributions to their employees’ health insurance plans.

Effective October 1, companies with 11 or more full-time equivalent employees (FTE) 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.

Employees will be excluded from the calculation if they have been exempted from the individual mandate by the Department of Revenue based on their religious preferences.

“We received a lot of excellent testimony that helped us make important clarifications to this regulation,” said DHCFP Commissioner Amy Lischko.

Lischko noted that last month’s statewide health insurance survey showed that more, not fewer, Massachusetts workers are getting insurance through their employer. According to the survey, 83 percent of people under 65 with health insurance in Massachusetts get coverage through their employers compared with 79.4 percent two years ago.

DHCFP postponed adopting regulations that define the free rider surcharge on companies whose employees and dependents receive health services through the uncompensated care pool. The free rider surcharge would apply only to those employers who do not contribute to or arrange for their employees to have access to health insurance through a section 125 plan. The agency is holding these regulations pending an imminent decision by the legislature on a change to the effective date.

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. The agency is in discussions with other agencies regarding filing in a manner that would eliminate the risk of identity theft and avoid the duplication of data collection among various agencies. A decision is expected before the end of the calendar year.

###