Today the Division of Health Care Finance and Policy (DHCFP) released the final regulations for the employer fair share assessment (press statement here). The regulations will take effect on January 1, 2009, rather than today.
The revised regulations are a compromise between Governor Patrick’s original proposal, which would have increased employer payments to about $45 million, and the current regulations, which are expected to bring in around $7.5 million. Under the revised formula, DHCFP estimates around $30 million will be paid by employers who don’t meet the requirement of offering “fair and reasonable” health coverage to their workers.
The regulations bifurcate the requirements. For firms with 50 or fewer employees, the 2-part “or” test remains the same. Companies can avoid the $295 per employee charge if either they (1) had at least 25% of their full-time employees enrolled the employer’s group health plan, or (2) offered to contribute at least 33% toward the premium cost for a group health plan for full-time employees that had worked at least 90 days.
For companies with more than 50 workers, the regulation changes the “or” to “and,” as originally proposed for all employers. These companies will generally have to meet both tests. However, a new exception allows larger firms to be exempt from the assessment if more than 75% of its full-time employees participate in the employer’s group health plan.
We are deeply grateful to DHCFP and EOHHS for the hard work that went into finding a compromise position. We concur with Celia Wcislo’s comments on the WBUR Commonhealth blog. The final regulation maintains the principle of shared responsibility in the face of the MassHealth and Commonwealth Care shortfalls. Yet, the roughly $22 million additional funds to be contributed by employers who are not meeting their responsibility to cover their employers is less than the amount low-income Bay Staters are being asked to contribute in increased premiums and copayments.
Last year the state paid some $370 million to provide health benefits just to employees of large firms with 50 or more employees. We would encourage DHCFP to report next year on all firms with 11 or more employees, to better inform the policy process as this disjunctive test in implemented.
Brian Rosman
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Commissioner Lischko, the ERISA preemption issue is an important principle for employers, the amount of the assessments or potential liability is not as important as the concept of ensuring government does not legislate what employers offer.
Crafting revenue regulations and using the insurance laws to dictate employer benefits and costs is not what the ERISA drafters had in mind.
Just to clarify. The original estimate (for the old regulation) was about 21M if I recall correctly. The state only ended up collecting 7.5 million as you note above. But, was that an error in the estimation or due to some emloyers not reporting and the state not collecting? The new estimate is 30 million, that seems to me to be only 9 million above what was originally projected. Hardly worth a potential ERISA lawsuit from the large firms.
When might firms with 50 or fewer employees have access to “fair and reasonable” premiums?