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Mass. relaxes health assessment rules

Mass. relaxes health assessment rules

Posted On: Oct. 01, 2008 2:11 PM CST

BOSTON—Massachusetts health care regulators agreed Tuesday to ease and delay proposed regulations that would have subjected more employers to large financial assessments to help fund coverage for uninsured state residents.

Under a 2007 rule, employers with at least 11 employees are exempt from a $295 annual per employee assessment if at least 25% of full-time employees are enrolled in their group health plans or if they pay at least 33% of the premium for individual coverage for employees within 90 days of their start date.

In July, the Massachusetts Division of Health Care Finance and Policy proposed tightening that rule so employers would have had to pass both tests to avoid the assessment.

That change in the Fair Share Contribution rule would have had its greatest impact on employers that have long waiting periods before new employees are eligible for coverage.

But the final rule assures that many employers, generally smaller firms, will continue to be exempt from the $295 assessment.

Under one change, employers with between 11 and 50 employees still will only have to pass the enrollment test or the premium test to be exempt from the assessment. The earlier proposed requirement that both the enrollment and premium tests be passed would have applied to employers with at least 11 employees.

Employers with more than 50 employees, though, will still have to pass both tests. But under a new safe harbor provision, an employer that does not pay at least 33% of the premium for individual coverage can still pass if at least 75% of full-time employees are enrolled in the employer's health insurance plans.

Additionally, the new rules won't go into effect until Jan. 1, 2009; regulators earlier proposed an Oct. 1, 2008, effective date.

Business groups, especially those representing smaller employers, welcome the rule changes.

"Small employers are breathing a sigh of relief as the latest proposal to take more money out of their pockets has been put on ice," Bill Vernon, state director of the National Federation of Independent Business/Massachusetts in Boston, said in a statement.

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