Big Massachusetts Businesses: Key Health Reform Changes
The core of the Federal Patient Protection and Affordable Care Act (ACA), signed into law by President Obama in March 2010, is the establishment of state health insurance exchanges and an individual mandate, which requires most Americans have health insurance effective January 1, 2014. For Massachusetts, the changes are not as profound as they are for the rest of the country. The Massachusetts Health Care Reform of 2006, the model for the ACA, has already established an exchange, the Massachusetts Health Connector, and has a mandate in place.
Most changes brought on by the full implementation of the ACA will be felt by uninsured individuals and small businesses--those with fewer than 50 employees--as the ACA offers subsidies, tax credits and increased health insurance options for these groups. Larger firms in Massachusetts, 98 percent of which offer their employees health benefits, will see some changes beginning January 2014 as provisions of the ACA place new requirements on these employers.
Employer notification to employees about the health insurance marketplace
In an effort to ensure all Americans are aware of their health care options under the ACA, the law requires businesses inform their employees about health plans and financial assistance available through the health insurance marketplace. No later than October 1, 2013, employers must provide notice to current full-time and part-time employees. New employees must receive notification when hired. The Department of Labor provides a sample notice that employers may use to comply with this rule.
The Federal Employer Shared Responsibility Payment
Under the Massachusetts law, businesses with 11 or more employees were required to contribute a minimum amount to their employees' health insurance premiums or pay a Fair Share Contribution of up to $295 per employee. In July 2013, Governor Deval Patrick signed legislation repealing this provision in anticipation of the Employer Shared Responsibility Payments these businesses will be accessed under the ACA.
The Employer Shared Responsibility Payment takes effect January 1, 2015. The provision was originally to become effective January 2014, but the Obama administration has delayed enforcement for one year to allow businesses time to comply with the law's reporting requirements.
Under the ACA, businesses with more than 50 full-time employees must provide health insurance or pay $2,000 per employee, with an exclusion for the first 30 employees. Large employers that provide insurance that fails to meet affordability standards will be required to pay $3,000 for each full-time employee who qualifies for subsidies in the health insurance marketplace. [1]
To be considered affordable, the employee's share of contributions to premiums for the individual's coverage must not exceed 9.5 percent of the employee's wages.
Under the federal law, full-time employees are defined as those working 30 or more hours a week. This is different from the Massachusetts law, which defines full-time employment as 35 or more hours per week.
Health insurance eligibility waiting period limited to 90 days
Beginning January 1, 2014, new employees who meet the requirements for participation in a group health insurance policy must become eligible for the insurance within 90 days of employment.
The regulation counts all calendar days, including weekends and holidays. Should the 91st day of employment fall on a non-business day, the plan may choose to make coverage effective earlier, but in no cases may the waiting period extend beyond 90 days.
Increased incentives for workplace wellness programs
In an effort to reduce health care costs, businesses are adding workplace wellness programs to their employee benefits packages. According to a 2013 RAND Health report, 75 percent of employees working for businesses with 50 or more employees are offered incentives for participating in wellness activities.
Beginning in 2013, Massachusetts businesses that employ 200 or fewer employees are eligible for a tax credit of 25 percent of costs associated with offering employees a certified wellness program. The maximum credit available is $10,000. [2] The Affordable Care Act gives employers increased flexibility in the incentives they offer employees to encourage greater participation. Effective January 1, 2014, employers may reward employees up to 30 percent of the cost of health insurance premiums for wellness program participation. Rewards for participation in tobacco cessation programs may be as high as 50 percent of premiums. The ACA also increases flexibility in the types of wellness programs businesses can offer their employees. [3]
[1] https://www.healthcare.gov/what-is-the-employer-shared-responsibility-payment/
[2] http://www.mass.gov/eohhs/docs/eohhs/wellness-tax-credit/obtaining-a-wellness-tax-credit-cert.pdf
[3] https://www.federalregister.gov/articles/2013/06/03/2013-12916/incentives-for-nondiscriminatory-wellness-programs-in-group-health-plans
Gillian Burdett is a freelance writer covering all things home and living. Her work can be found on Examiner.com.
