Business groups won a partial victory when Gov. Deval Patrick’s administration decided to exempt companies with 50 or fewer full-time employees from a new health care coverage requirement.  The Patrick administration unveiled the change, which would collectively cost businesses in the state about $30 million a year under the state’s “Employer Fair Share” rules.

That’s a big increase from the previous cost of $7.5 million a year in Fair Share fees. But the changes would have cost about $45 million a year under the Patrick administration’s original draft proposal, which drew widespread criticism in the business community.

The central issue in the Fair Share rules, which were put in place as part of the state’s 2006 health care reform law, involves deciding which employers are liable for a $295-per-worker annual fee for not making a reasonable contribution toward their workers’ health care.  Companies with fewer than 11 employees have been exempt since the program’s start.

Other employers have been able to avoid paying the fee if at least 25 percent of their full-time workers participate in an employer-sponsored health plan or if they offered to contribute at least 33 percent to the premium cost for a group health plan for full-time employees who had worked at least 90 days.

The Patrick administration is changing the rules to require employers meet both requirements to be exempt from the fee.  Business groups complained loudly, saying that many companies – especially small businesses – could be encouraged to drop their health plans and just pay the fees.

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This entry was posted by Adam V. Russo on Monday, October 6th, 2008 at 10:30 am and is filed under Massachusetts, News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.