Under the Massachusetts health care reform initiative, which became law in April 2006, 439,000 residents of the Commonwealth have become newly insured. Slated to become effective in 2009 are provisions which will impose new minimum standards on the health insurance that Massachusetts residents are required to carry under financial penalty. The Commonwealth seeks to further expand the reform by widening the group of employers potentially subject to a “fair share contribution” to the state fund.

Massachusetts requires that individuals age 18 and older carry health insurance or face potential loss of their state personal income tax exemption and additional penalties. Until 2009, any health coverage under an insured plan issued by a licensed insurance company authorized to transact business in Massachusetts is sufficient. However, effective January 1, 2009, the coverage must satisfy “minimum creditable coverage” standards in order to comply. Among other features, the standards will require coverage to include:

• Primary and preventive care
• Maternity and newborn care
• Emergency services
• Hospitalization benefits
• Diagnostic screening procedures and tests
• Prescription drug coverage (with a separate deductible capped at $250 for an individual and $500 for a family)
• Outpatient services
• Mental health services
• No annual or per-sickness maximum
• Annual deductibles capped at $2,000 for individual and $4,000 for family plan
• Annual out-of-pocket spending caps of $5,000 for an individual plan and $10,000 for a family plan for in-network services (if the plan includes a deductible or co-insurance, and any service that requires a co-insurance on core medical services)
• A minimum of three preventive care visits to the doctor for an individual and six for a family before any upfront deductible

Employers of 11 or more full-time equivalent employees must pay to a state fund an annual “fair share contribution” of up to $295 per employee unless they make a “fair and reasonable” premium contribution toward their employees’ health insurance. They are deemed to make a “fair and reasonable” contribution if either:

• There is at least 25 percent participation by full-time employees in the employer’s group health plan, or
• The employer offers to contribute at least 33 percent of the premium cost of its health plan for individual coverage to all full-time employees employed more than 90 days.
• For this purpose, a full-time employee is one who works at least 35 hours per week at a Massachusetts location.

The Commonwealth has proposed to tighten this requirement effective October 1, 2008, to require that both prongs be met in order for the employer to have made a “fair and reasonable” contribution. Reportedly, private employers in the state have balked at the additional requirement and the specter of a lawsuit challenging the validity of the law, and whether it is preempted by ERISA, have been raised.

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This entry was posted by Adam V. Russo on Thursday, October 16th, 2008 at 2:46 pm and is filed under Massachusetts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.