Associated Industries of Massachusetts today urged Governor Deval Patrick to approve a carefully crafted health insurance compromise contained in the proposed state budget, even though the Obama administration yesterday postponed a key element of federal health care reform.
Included in the budget for Fiscal Year 2014 now on the governor’s desk is a provision eliminating the $295 per employee Fair Share assessment that Massachusetts employers have been paying under state health reform since 2006. The budget would also drop the requirement that employers collect and retain the Health Insurance Responsibility Disclosure (HIRD) form, and replace the current $67.20 per employee contribution to the Medical Security Trust Fund with a $50 per employee contribution to fund subsidized health care.
The measures, intended to make way for the federal Affordable Care Act and reduce the administrative burden on employers who provide health insurance, are a product of extensive negotiations among AIM, state lawmakers and groups representing the health care industry and consumers.
The proposed changes became more complicated yesterday when the U.S. Department of the Treasury announced that it will postpone until 2015 the federal health reform mandate that larger employers provide health insurance for their workers or face penalties. Those penalties - $2,000 per each full-time employee after the first 30 for companies that do not provide insurance or $3,000 per full-time employee for employers who offer health insurance that is either not affordable or of minimum value– were expected to replace the Fair Share assessment.
The postponement raised the possibility that Massachusetts employers who do not provide affordable health insurance for their workers may face no financial penalty for the next 18 months.
John Regan, Executive Vice President of Government Affairs at AIM, said the new implementation date for federal penalties does not diminish the value to employers and consumers of eliminating Fair Share and the Medical Security Trust Fund.
“The temporary presence or absence of health reform penalties does not drive benefit decisions for the vast majority of Massachusetts employers,” Regan said.
“Those employers offer health insurance to ensure they attract and retain key talent in a competitive market.”
Regan stressed that the requirement under the federal Affordable Care Act that individuals purchase health insurance by January 1, 2014, remains in effect.
Mark J. Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, said in a blog post that the administration decided to postpone imposition of employer penalties after hearing concerns from business about the complexity of the requirements and the need for more time to implement them effectively.
“First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees,” Mazur wrote.
The administration says it will provide formal guidance within a week.
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.
Elimination of the Fair Share assessment has been a priority for the AIM Health Policy Committee and was proposed by Governor Patrick in January.