Advocates To Patrick: Preserve Fair Share Contribution
A one-year delay to a key provision of the Affordable Care Act will not dissuade Bay State employers from offering health insurance, according to the Patrick administration and the state's major business association, while a health care advocacy group is imploring Gov. Deval Patrick to preserve an existing state penalty on employers.
Health care advocates are asking Patrick to reject a provision in the budget on his desk that would make way for the federal fine on large employers who don't offer affordable health insurance. In anticipation of new federal fines, lawmakers included in their final $34 billion state budget bill a provision that would repeal the state's fair share employer contribution law, a major feature of the 2006 Massachusetts health reform and a model for employer responsibility payments under the 2010 federal law.
"We are asking the governor to veto this section of the budget in order to maintain the Employer Fair Share Contribution until the federal employer requirements are enforced," said Health Care for All Executive Director Amy Whitcomb Slemmer in a statement. She said, "State health care reform has worked and the Employer Fair Share Contribution is a piece of that success so we should maintain it until the federal provisions are in place."
With the ACA set for a 2014 rollout, state officials have been looking to eliminate overlapping state and federal laws and regulations. Patrick signed legislation Friday that conforms state laws with the ACA, though he has yet to act on the budget, which includes the repeal of the state's employer fines.
Whitcomb Slemmer said without the fair share contributions, employers who do not cover their workers "have an unfair cost advantage against a competitor who does. Unchecked, this could lead to a race to the bottom."
The one-year federal delay in implementing fines and reporting by employers, announced by the Obama administration last week, has raised questions for some, though a business organization and the Patrick administration were of like mind that it would not change the health insurance landscape for Bay Staters.
"We do not expect the delay in implementing the federal employer penalty to affect our high rates of employer-based coverage here in Massachusetts," Administration and Finance spokeswoman Alex Zaroulis said in a statement. "Massachusetts' employers have been key partners in the success of the Commonwealth's landmark health reform law, and we know they will continue to be in the future. They offer coverage to their employees at rates that exceed their national counterparts because it is good business to provide coverage."
"The temporary presence or absence of health reform penalties does not drive benefit decisions for the vast majority of Massachusetts employers," Associated Industries of Massachusetts Executive Vice President of Government Affairs John Regan said in a statement. "Those employers offer health insurance to ensure they attract and retain key talent in a competitive market."
In a statement online, AIM said the state's preparations to make room for the ACA were the "product of extensive negotiations among AIM, state lawmakers and groups representing the health care industry and consumers." The budget contains additional changes, according to AIM, including the elimination of a Health Insurance Responsibility Disclosure form requirement and a reduction of employers' required contribution to subsidized health care, dropping the fee from $67.20 to $50 per employee.
The federal law was signed by President Barack Obama in 2010 and since then, Republicans in the U.S. House have voted repeatedly to repeal the law, much of which, including the establishment of health insurance exchanges similar to the Commonwealth Connector, is set to go into effect in 2014.
The federal penalty, between $2,000 and $3,000 per employee, is several times larger than the current state penalty of $295 per employee.
White House advisor Valerie Jarrett wrote on the White House website that the Obama administration is revamping its requirements for businesses to report employees' health care access, saying "detailed reporting may be unnecessary for businesses that more than meet the minimum standards." Likewise the employer responsibility payments will not go into effect until 2015.
"As we make these changes, we believe we need to give employers more time to comply with the new rules," Jarrett wrote. "Since employer responsibility payments can only be assessed based on this new reporting, payments won't be collected for 2014."
"The point is, we're going to be ready when the federal government is ready and as I say there's some considerations about that gap that we'll look to, but preliminarily we can bridge," Patrick told reporters last week when asked about the possibility of a gap in between the state and federal requirement.
Pioneer Institute Director of Health Care Policy Joshua Archambault said he is unsure what effect the delay would have on Massachusetts employers' health care decisions.
"Does that mean that the Legislature will have to go back in and change the language and put back in the status quo?" Archambault asked. He said, "It's a really ambiguous and unanswerable question right now."
The federal law applies to larger businesses and increases the penalties those businesses would be required to pay, Archambault said.
Businesses with between 21 and 29 employees face current state penalties if they do not provide affordable insurance, but would be exempt along with smaller businesses under the federal ACA, Archambault said.
As part of the ACA implementation bill, lawmakers ordered a waiver request from an ACA requirement limiting the factors that can be looked at to set health insurance premiums, arguing that the limited scope under the federal law will drive up costs for many. The bill Patrick signed Friday requires the administration to seek a federal waiver exempting Massachusetts from the federal standard of using only four ratings factors. Patrick has said he has already asked Health and Human Services Secretary Kathleen Sebelius about a waiver from that requirement, but she said she has no authority to grant one. The Bay State was granted a waiver for a three-year phase-in for the new rating factors that can be used.
AIM said the Obama administration's delay of the employer fines gives credence to the administration's ability to grant a waiver of the rating factors.
"AIM believes the action by the Treasury Department confirms that the administration has the authority to grant a request to be made by Governor Patrick for a waiver from certain elements of the ACA that could drive up premiums for an estimated 60 percent of employers," the organization wrote.
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