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Mass
Healthcare Reform – What You Need To Be Doing Now
There are
some important parts of the new Massachusetts healthcare legislation that we
want to bring to your attention.
• Since July 1,
2007, dependents are now able to remain on parent’s health insurance
plan to age 26 (or 2 years past loss of federal dependent status under
IRS rules, if earlier.)
• As of 7/1/07,
practices may not offer higher paid employees better health insurance options
than they provide for lower wage employees. In other words, you may
not require that lower paid employees contribute
a higher percentage of premiums than their higher paid colleagues nor can
you provide a better level of benefits to higher paid employees. (This does
not apply to larger employers that “self-fund” their health
plans.)
• Groups with 11
or more employees are subject to the new “Fair Share Assessment” if
they don’t make a “Fair and Reasonable Contribution” toward
their employees’ health insurance. PIAM can help you determine
if you pass the test(s) to avoid this penalty.
• Most groups with
11 or more employees are required to implement a Section 125 plan by
July 1st. These are plans that allow employees to pay for health
insurance with “pre-tax” dollars. They can also reduce
employer FICA tax. If you don’t have a plan in place, or
if your current 125 plan doesn’t cover all of your Massachusetts
employees, PIAM can help you set one up. Remember, plans without
Section 125 plans are exposed to the “Free Rider Surcharge”,
which could be considerable.
• Employers with
11 or more employees are required to file an employer Health Insurance
Responsibility Document (HIRD) and retain an employee HIRD form for
each employee (Form attached along with the pertinent regulations and
the latest Bulletin from the Commonwealth.)
For a look at a helpful
employers' chart see below.
How
PIAM Can Help Your Practice
• Most Massachusetts
health plans have developed new group plans as a result of Massachusetts
health reform. If you contribute all or part of your employees’ premium
your employees will have some new plan designs to choose from. These
new Massachusetts "Connector: plans are expected to be available
for effective dates beginning September 1, 2007. PIAM can assist in
securing one or more of these plans for your practice.
• As always, we
can obtain quotes for traditional plan designs from all of the Massachusetts
health plans for any practice with one or more employees, including
solo practitioners. These providers include Blue Cross Blue Shield
of Massachusetts, Harvard Pilgrim, Tufts, Fallon, Health New England
and Neighborhood Health plan.
| <11
Full-time Employees |
11+
Full-time Employees |
| Not Subject to Fair
Share Contribution or Section 125 Requirements |
Must have 25% of
FTEs covered under group plan or pay 33% of cost for FTEs (effective
10/1/06) |
May provide health
insurance |
Must establish a
Section 125 Plan (effective 7/1/07) |
May establish
a Section 125 Plan |
Must file employer
HIRD form and maintain employee HIRD forms (effective 7/1/07) |
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| < 50
Full-time Employees |
All
Employers |
| Insurance Partnership
expanded to include annual incomes up to 300% FPL |
Dependents allowed
to remain on parent’s plan for earlier of 2 years past loss of
IRS dependent status or to age 26 (effective 1/1/07) |
| Employees may purchase
health insurance through the Health Connector on a non-group or voluntary
basis (effective 7/1/07) |
Employers may not
provide lesser benefits nor require a higher percentage of premium
contribution for lower wage employees (effective 7/1/07) |
| Employer may offer
and contribute to health insurance through the Health Connector (expected
by 9/1/07) |
As of 7/1/07, employees
age 18 and older must obtain and maintain health insurance regardless
of employment status or employer size |
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Employees of large
(> 50 FTEs) employers who are eligible for employer-sponsored coverage
may not purchase coverage through the Connector if employer contributes
at least 33% |
These are some of the
highlights. No doubt, there’s much more to come. You’re welcome
to contact us at 781-434-7398 if you have any questions or if you would
like additional information.
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