Wednesday, August 13, 2008

State Watch

Massachusetts Governor Proposes Rule That Would Require Businesses To Contribute More to Health Coverage

      Massachusetts Gov. Deval Patrick (D) on Monday proposed a state regulation that would require businesses to contribute more to employee health coverage or pay an annual "fair share" penalty, the Boston Globe reports. Under existing state law, businesses with more than 10 full-time workers must offer health coverage or pay an annual penalty of $295 per worker. Employers could choose either to cover at least 33% of their workers' premiums within the first 90 days of employment or ensure that at least 25% of their full-time workers are enrolled in an employer-sponsored plan.

The proposed regulation would require employers to comply with both requirements or pay the annual penalty. Public documents released on Monday stated that the regulation, if adopted, would be implemented on Oct. 1. The new rule would generate an estimated $45 million this fiscal year, which would be used to close a funding gap in the state's health insurance law. A public hearing on the proposed regulation is scheduled for Sept. 5.

Brian Rosman, research director for Health Care For All, said, "We think this implements the shared responsibility concept that was the hallmark of health care reform," adding, "It makes sense to us to say to companies that offer minimal or no benefits, 'You have to make a small contribution.'"

The Retailers Association of Massachusetts, which represents about 3,000 state businesses, said that the new regulation would force its members -- especially small-business owners -- to spend thousands of dollars more on employee health care and would lead some companies to drop coverage altogether. Association President Jon Hurst said that hundreds of businesses, particularly those that are seasonal, would be affected by the proposed regulation because it would require them to submit quarterly reports on workers' health coverage, rather than annual reports.

The proposed rule comes two weeks after lawmakers approved a supplemental funding bill that increases funding for the state's health insurance law by $100 million through additional assessments on insurance companies' reserve accounts and hospitals, as well as money from the Medical Security Trust Fund, which is used to fund health coverage for the unemployed (Lazar, Boston Globe, 8/12).