The Massachusetts House Ways and Means Committee wants the Baker Administration to examine the assumptions underlying its controversial proposal to have employers pay for a shortfall in the MassHealth program.
The proposed Fiscal Year 2018 budget released by the committee today would create a six-month review of the $2,000-per-employee “Fair Share Assessment” that the administration included in its own budget proposal in January.
The House plan would require the administration to conduct public hearings and determine the potential effect of the assessment on small business. It would also limit the definition of a full-time employee in any assessment by excluding temporary and seasonal employees.
Perhaps most importantly, the House envisions that any assessment would generate $180 million instead of the $300 million initially projected by the administration. MassHealth is the commonwealth’s Medicaid health-insurance program for low-income people.
“The issues surrounding the MassHealth deficit and the proposed employer assessment are extraordinary complex. We believe the House proposal lays out a prudent process for reviewing the issue in a manner that will allow AIM to continue its ongoing discussions with lawmakers and the administration,” said Richard C. Lord, President and Chief Executive Officer of AIM.
The administration’s plan would impose a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, and that do not make a minimum contribution of $4,950 annual contribution for each full-time worker. If 70 percent of a company’s employees accept company health insurance, the company would be assessed $2,000 per employee for the number of employees represented by the 10 percent difference.
The employer assessment represents an expansion of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act (ACA).
The House Ways and Means budget will require the administration to consider the following factors in developing any sort of health-care assessment on businesses in Massachusetts.
- What a reasonable utilization (uptake) rate might be by reviewing other entities, such as the Group Insurance Commission;
- Whether employees receive premium assistance through MassHealth;
- Whether employees receive primary MassHealth benefits;
- Whether employees receive insurance from other, non-MassHealth sources (spousal; parental; veterans);
- Whether employees are residents of the commonwealth (and thus eligible for MassHealth);
- What average Massachusetts employer contribution rates might be.
The review of the proposed assessment would involve multiple state agencies, including the Executive Office of Health and Human Services, the Department of Revenue (DOR), the Health Connector, the Division of Unemployment Assistance, the Center for Health Information and Analysis, and MassHealth.
A public hearing on proposed regulations must be held by the first week in October 2017.
The administration would be required to implement all regulations relative to an assessment by November 1. Full implementation of any resulting policy would occur on January 1, 2018. A small-business impact statement must be filed.
AIM has opposed the employer assessment because the growing shortfall at MassHealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable largely to problems arising from the ACA. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.
The House budget would require the administration to seek an ACA waiver that would allow the original prohibition to be reinstated.