Briefing: Fair Share Health Insurance Contributions
For employers, the most significant aspect of the 2006 Massachusetts health care reform law was the requirement that any business with 11 or more full-time employees help pay for the workers’ insurance or pay a “fair share contribution” to the state. A new state report shows that 95 percent of businesses that are subject to the requirement help pay for insurance.
What happens to fair share contributions?
The state uses them to help pay for Commonwealth Care, which provides subsidized insurance to low-income residents. Since the policy was implemented, the state has assessed $62.8 million in liability to employers who have been determined not to be making a fair contribution to insurance.
What constitutes a reasonable contribution to employees’ insurance?
Based on standards set at the start of 2009, companies with 11 to 50 full-time-equivalent positions must either contribute 33 percent toward the cost of individual premiums for full-time employees after 90 days or have at least 25 percent of their full-time workers enrolled in an employer-sponsored plan. The standards are higher for firms with more than 50 positions. Employers must also offer Section 125 plans, which let employees pay for insurance with pre-tax earnings.
How many of the state’s employers make a sufficient contribution?
Of the state’s 188,000 employers, only 12 percent are large enough to be subject to the insurance requirements at all. Of those that are, 95.4 percent met the requirements for contributions in 2010. That leaves only around 1,000 employers that were subject to the fair share assessment.
What has the fair share requirement meant for workers?
The state argues that Massachusetts’ best-in-the nation rate of insurance coverage, over 98 percent, is largely due to employers’ contributions.
Are some industries less likely to pay for insurance than others?
Of the types of companies broken out in the state report, full-service restaurants were least likely to meet the requirements for contributions, with 79 percent doing so. One hundred percent of law offices met the requirements.
WBJ Web Partners
Most Recent
Most Recent
0 Comments