Marlene Maffe’June 5, 2011
The objective is to understand the impact and employer cost as a result of Healthcare Reform to companies currently and what is to come in the future in Massachusetts and across the Nation.
On March 23, 2010 President Barrack Obama signed two bills that became law; The Patient Protection and Affordable Care Act (PPACA) and the HealthCare and Education Reconciliation Act of 2010, the latter was an amendment to the PPACA and was signed into law on March 30, 2010 and the National Healthcare Reform was born. In the state of Massachusetts, Healthcare Reform has been a reality since April 12, 2006 when the  Act Providing Access to Affordable, Quality, and Accountable Health Care was passed. Healthcare reform on the state level in Massachusetts was developed to provide affordable health insurance to all adult residents that could not afford coverage and to ensure that all adult residents were covered by a health insurance plan. They created the Commonwealth Connector, a program that connects residents with insurance plans that are affordable. If the resident is employed and the employer has more than 11 employees, the company is responsible for insuring their employees and offering a reasonably priced health plan that meets the Minimum Credible Coverage (MCC). The MCC is a specific list of provisions and benefits that must be included in the employer offered health plans. If an employee is offered affordable coverage they must enroll to avoid paying tax penalties which include; losing your personal tax exemption, a penalty of $219 per each uninsured adult and also be subject to pay a penalty for each month they were not insured (half of the cost of the lowest affordable healthcare plan available). The proof of coverage is enforced by the residents state tax filing, each year every insured adult will receive a certificate of coverage from the Health Plan providing said coverage to accompany their tax filing to prove that they have health coverage. There are some exceptions to being insured, they are heavily regulated and documentation is needed to gain the exemption from the Commonwealth Connector Authority; an example of an approved exemption is based on the individual religion that may not allow them to enroll in health insurance. The Massachusetts Healthcare Reform has mandated that employers adhere to the “Fair Share Contributions” rule. This rule mandates that employers with 11 or more Full time employees (an employee working 35 hours or more) must have at least 25% of the eligible full-time employee population enrolled in their health plans or they must contribute at least 33% of the premium for all Full-time employees. If the employer has more than 50 employees, they must meet both of the “Fair Share Contributions Rule” to be compliant with the rule. If either sized company fails to meet these guidelines they will be required to pay a fee of $295 per employee per year. The Commonwealth enforces the rule by requiring quarterly or annual reporting requirements imposed on employers. (part-time employees are subject to pro-rated fees) Employers must also establish a Section 125 Cafeteria Plan, this allows employees to have their contributions deducted from their pay as a pre-tax deduction. A pre-tax deduction is not subject to federal and state taxes and allows employees to reduce their taxable income and the employer saves on FICA taxes. Employers must also adhere to a non discrimination policy that states that they will not offer a higher contribution offset to a highly paid employee than they would to a lower paid employee, all contributions made by the employer to employee must be the same. This will be an issue for companies that pay the executives premium at 100%, my company will need to change how we administer our Executive Health Plans. The last requirement...