On Tuesday, Governor Patrick announced his second business-related legislative proposal of the 2013-2014 session (see press release). The proposal is part of the process of adapting Massachusetts’ health care system to the coming Affordable Care Act (ACA).
In addition to freezing Unemployment Insurance (UI) rates for businesses, HD 162, “An Act to Support Employers in the Commonwealth” makes several changes that impact workers’ access to health coverage:
- Repealing the Employer Fair Share Contribution (FSC) program as of June 30, 2013.
Chapter 58 was built on the foundation of shared responsibility. The law relies on contributions from all stakeholders, including individuals, government, insurers, providers and employers. Currently, the FSC program requires employers with 11 or more full-time equivalent employees to provide coverage to their workers or pay an assessment of up to $295 per worker per year. In July, the minimum number of employees to be exempt from the assessment is slated to increase to 20 workers and employees who have coverage through other sources would not be counted in the calculation. The Affordable Care Act (ACA) employer responsibility requirements – which apply to firms with 50 or more full time employees – take effect January 1, 2014.
- Eliminating the Medical Security Program (MSP) as of January 1, 2014.
Established in 1988, MSP covers workers collecting unemployment insurance either through direct coverage or COBRA premium assistance. The program has undergone several changes over the years and has been an important lifeline during the recent recession. The state seeks to streamline coverage options through implementation of the ACA. Most workers eligible for MSP will be able to access coverage through MassHealth or the Connector as of January 1st.
- Creates the employer responsibility contribution trust fund.
The Governor’s proposal maintains the current MSP assessment, at a slightly lower rate, and under a new name. Revenue from the employer responsibility contribution will be directed to MassHealth and the Connector to fund subsidized coverage for low-income residents. Funding from the employer responsibility trust fund is necessary to ensure we do not backtrack on the gains we have made in offering affordable, quality health care to Massachusetts residents.
We have long believed in the principle of employer responsibility. The Fair Share Contribution surely played a role in increasing the proportion of employers in Massachusetts who offer health care coverage to their workers. While offer rates declined in other states, ours went up in 2007 and stayed high though the recession. We were pleased that Massachusetts provided the blueprint for the ACA, even though the details differ substantially, including for the employer requirements.
So we understand the need to reexamine our policy, and we support the administration’s determination to continue substantial employer responsibility for health care in Massachusetts. We look forward to working with the Administration and the Legislature on the details of this bill and plan to monitor the impact of these policy changes on Massachusetts consumers.