Senate Municipal Plan Design Language Falls Short – Undercuts Savings

Posted by John Regan on Jun 14, 2011 12:31:00 PM

describe the imageAssociated Industries of Massachusetts is asking lawmakers to adopt the House version of a bill giving cities and towns the power to control health insurance costs.

AIM said in a letter to budget conferees that the Senate version of the municipal health measure would undermine the estimated $100 million in savings promised by the bill.

AIM's concern about the Senate bill was confirmed this morning by a study showing that:  “Dozens of communities across the state would lose the benefits of municipal health care reform under the Senate’s provision requiring that municipal contributions for retirees be the same as for active employees, according to a preliminary analysis by the Massachusetts Taxpayers Foundation. The Foundation has identified 50 municipalities and regional school districts that would be impacted, with that number likely to be as high as 100 when all communities have been analyzed.”

Click here to read the MTF analysis.

AIM and Massachusetts employers generally support municipal health reform because the spiraling cost of health insurance is eroding the ability of city and town governments to deliver educational, public safety and other services upon which the economy depends.

Topics: Associated Industries of Massachusetts, Health Care Reform, AIM, Municipal Reform, Controlling Health Care Costs, Senate Budget

Does Your Company Qualify for the Federal Health-Care Tax Credit?

Posted by Kyle Pardo on Jun 8, 2010 3:53:00 PM

More than 102,000 Massachusetts employers may be eligible for the new federal tax credit intended to help small companies cope with the expense of providing health insurance to employees. But how do you know whether or not your company qualifies? How much is the tax credit? And what's in the fine print?

The small business health-care tax credit provision of federal health care reform (Patient Protection and Affordable Care Act, or PPACA) was created to reduce health insurance costs for employers with fewer than 25 full-time equivalent (FTE) employees.  The amount of the income tax credit is graduated based on the number of FTEs, but the maximum for the 2010-2013 tax years is 35 percent of the amount a qualifying employer contributes toward the cost of coverage for its employees. That's real money if you run a small business. 

The IRS recently sent post cards to approximately four million businesses nationwide that may be eligible for the tax credit, including more than 102,000 in Massachusetts.  The tax credit is available to employers meeting all four of the following criteria for tax years 2010 - 2013:

  1. The employer must either be a taxable employer or a 501(c) tax-exempt employer;
  2. The employer must have fewer than 25 full-time equivalent employees for the tax year;

    The definition of one FTE is 2,080 payroll hours per year.

    "Payroll hours" include all hours worked, as well as all hours paid but not worked (vacation, holidays, sick time, jury duty and all other paid absences).

    Seasonal workers may be excluded if they work no more than 120 days in the year. It is important to remember that the definitions of FTE and "seasonal employee" are different under the federal and Massachusetts health care reforms, and many small employers must use both - just one small example of the growing complexity of integrating state and federal requirements.

  3. The average annual wages for each FTE must total less than $50,000, calculated by dividing the total gross wages, i.e., before any deductions are made for taxes, 401(k), benefits, etc., by the number of FTEs; and
  4. The employer must contribute at least 50 percent of the individual premium cost for health insurance provided through a qualifying arrangement.  This is known as the "uniformity requirement."  The definition of "health insurance" includes medical insurance, stand-alone dental plans, stand-alone vision plans, and long-term care plans.  

For purposes of both the FTE and average wage calculations above, certain business owners, partners, and their family members, as defined in IRS guidance, are excluded, i.e., they are not deemed to be "employees."

Read the Full Article

Topics: Associated Industries of Massachusetts, Health Care Reform, Health Care Costs, Controlling Health Care Costs, Health Insurance

Early Intervention & Controlling Massachusetts Health Care Costs

Posted by Eileen McAnneny on Jun 2, 2010 10:00:00 AM

One item passed during the Senate budget debate highlights the dilemma and challenge facing lawmakers in these trying economic and fiscal times.

On the one hand, the Senate has made controlling health care costs for small businesses a top legislative priority for this session. On the other hand, they continue to advance policies that add new costs for the very businesses they seek to help.

Budget Amendment #628 excludes early intervention services from being subject to co-payments or deductibles for coverage offered through a licensed carrier. Early Intervention services are provided to young children from birth until their third birthday. By excluding early intervention services from any type of cost-sharing mechanism, including co-payments and deductibles, employers have less ability to control their health care costs and keep monthly premiums at a minimum through use of innovative benefit design.

While we recognize the value of early intervention services, AIM is not supportive of this measure as it increases monthly premiums at a time when employers are struggling with the high cost of health care, and sets a bad precedent as the Senate works to provide relief to small businesses.

Small- and medium-sized businesses will largely bear this new cost since large, self-insured employers that are governed by the Federal Employee Retirement Income Security Act (ERISA) are not subject to this new mandate.

We cannot make the cost of health care "free" to consumers while thinking we can keep costs down for businesses at the same time. Someone has to pay for the health care consumed.

If patients do not have out-of-pocket expenses, they consume more health care services than they need. This does not lower costs. If businesses must shoulder more of the cost of a particular service, as proposed by this amendment, there will be less money available for other types of health care benefit; less for compensation to employees; and less for investment in the business.

Lawmakers can no longer shield consumers from the true costs of health care. Consumers are key to transforming out health care system into a more rational and efficient one. The policy to disallow cost sharing for early intervention services is a step in the wrong direction and at odds with the Senate goal of reducing health care costs for small businesses.

We hope this language is not adopted in the final budget approved by the Budget Conference Committee and sent to the Governor


We hope this language is not adopted in the final budget approved by the Budget Conference Committee and sent to the Governor

Topics: Health Care Reform, Health Care Costs, Controlling Health Care Costs, Senate Budget, Massachusetts, Federal Employee Retirement Income Security Act, Early Intervention Services

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