A Longer Road to Uncertainty on Health Reform

Posted by John Regan on Apr 25, 2014 8:33:00 AM

Delay does not equal resolution.

That’s the message employers in Massachusetts have for lawmakers in the wake of yesterday’s announcement that the federal government will give Massachusetts an additional year to phase in insurance rating changes that could boost health premiums for some small companies by more than 50 percent.

SebeliusThe extended transition period, announced in a letter from outgoing Health and Human Services Secretary Kathleen Sebelius (right) to Governor Deval Patrick, buys the governor, the Legislature and the Massachusetts Congressional delegation another year to press the case for a permanent waiver from changes that introduce needless uncertainty into a health insurance market that was working well prior to federal reform.

“The additional year is a step in the right direction, but it does not represent a permanent solution to an issue that could severely harm Massachusetts small business,” said Kristen Lepore, Vice President of Government Affairs at Associated Industries of Massachusetts.

“Employers urge Governor Patrick and the Legislature to redouble their efforts to secure a permanent waiver from the rating-factor changes of federal reform. It’s wrong to penalize employers in the one state that led the nation on health-care reform.”

The federal Affordable Care Act limits to four the rating factors used to calculate group health insurance premiums for companies with 50 or fewer employees. Current Massachusetts law allows for additional consideration of factors such as industry, participation rate, group size, intermediary discount and group purchasing cooperatives.

A study by health insurance companies indicates that the rating changes will raise or lower rates for small companies by up to 57 percent, on top of average increases of 3.7 percent in their base insurance premiums.

Governor Patrick requested a rating-factor waiver on September 3, 2013, noting that “a waiver of rating factor requirements will avoid increases in health insurance premiums for a large segment of our small-employer population and their employees.” Sebelius denied the request on September 26.

But the Sebelius told the governor in her letter yesterday “there have been some additional policy developments … that I believe need to be reflected in the 2013 transition period outlined for Massachusetts.”

The transition period for the elimination of small group market rating factors permitted under Massachusetts law now looks like this:

  • For policy years beginning on or after January 1, 2014, but before January 1, 2015, small group market issuers may use 2/3 of the disallowed factors;
  • For policy years beginning on or after January 1, 2015, but before January 1, 2016, small group market issuers may use 2/3 of the disallowed factors;
  • For policy years beginning on or after January 1, 2016, but before January 1, 2017, small group market issuers may use 1/3 ofthe disallowed factors;
  • For policy years beginning on or after January 1, 2017, small group market issuers must be in full compliance with the rating rules under Public Health Service Act section 2701.

Sebelius writes that the federal government may consider an additional one-year extension.

“The extended transition is good for our market,” said Insurance Commissioner Joseph G. Murphy.  “The additional year will benefit our small employers and give them extra time to ensure that they are making the best insurance choices for their workers.”

A survey by AIM found that 60 percent of small employers who renewed their health insurance policies on January 1 saw increased premiums under the limited phase-out of the five Massachusetts rating factors. Among the employers who said they would consider making changes to their health plans as a result of the increases, 20 percent told AIM they plan to drop coverage all together because the price hikes are unaffordable. 

Topics: Small Business, Health Care Reform, Health Care Costs

Employers Maintain 'Show Me' Attitude Toward Economy

Posted by Andre Mayer on Apr 1, 2014 9:55:00 AM

Massachusetts employers might just as well be from Missouri these days as they continue to exhibit a “show me” attitude about the strength of the economy.

BCI.March.2014The Associated Industries of Massachusetts Business Confidence Index rose 1.1 points in March to 51.1, holding close to a neutral 50 on its 100-point scale. Bay State employer sentiment has remained locked for 18 months in a narrow range between optimism and pessimism as both the state and national economies have failed to develop sustained growth momentum.

"Business confidence in Massachusetts has been in neutral range for a year, dipping below neutral when there was a threat of federal default and when the government shut down in October, but otherwise with not much upside," said Raymond G. Torto, global Chairman of research at CBRE and Chair of AIM's Board of Economic Advisors (BEA).

Torto and other analysts point to several factors that are holding down confidence, including a generally negative view of national conditions, deadlocked national politics, weak readings among small employers and hiring levels that have been less robust than might be expected during a recovery period.

The AIM confidence index is up a point from its level of last March, but below where it was as recently as September.

The Current Index, tracking employer assessment of existing business conditions, added nine-tenths of a point from February to 49.3, while the Future Index, measuring expectations for the next six months, rose 1.2 to 52.9.

"The numbers are a bit better than February's, and last March's, but still reflect some fear of economic uncertainties," remarked Sara L. Johnson, Senior Research Director of Global Economics at IHS Global Insight, a BEA member. "The fundamentals driving consumer and business spending (incomes, balance sheets, and credit availability) are improving."

The U.S. Index of business conditions prevailing nationally rose 1.9 points in March to 46.2, and the Massachusetts Index of conditions within the commonwealth had a similar gain to 48.6.

Neither increase ignited much hiring, the survey shows. The Employment Index lost 1.3 points to 50.1. Employers, many of them facing pressure on prices, are reluctant to add staff.

"It is increasingly clear that lack of confidence among smaller employers is a serious concern for Massachusetts," said Richard C. Lord, AIM’s President and CEO, a BEA member.

"In our March survey, larger employers were positive about business conditions in our state, but those with 25 employees or fewer were markedly negative. Ours is predominantly a small-employer economy, and our hopes for creating jobs to bring down the unemployment rate – particularly in regions of the commonwealth that are being left behind in the recovery – depend on the growth of those small firms."

Topics: Small Business, AIM Business Confidence Index, Massachusetts economy

Small Employers Face Numbers Game on Employment Law

Posted by Tom Jones on Apr 30, 2013 12:36:00 PM

Small employers in Massachusetts are well advised to keep their eyes on the numbers 1, 6, 15, 20 and 50. No, it’s not the winning combination for this week’s Powerball, but rather the numbers game for complying with the multiple employment laws that kick in when a company grows its work force to certain levels.

Small businessAIM regularly updates and publishes its reference guide on small business compliance to help small employers cope with an increasingly complex maze of laws and regulations. So here are a few of the more important numbers, taken from the new edition of the small-business reference guide due to be published later this month:


Many laws apply to an employer as soon as the company hires one employee. Among them: workers compensation, unemployment insurance, immigration and the federal and state wage and hour laws.


Massachusetts employers with six or more employees are subject to the state’s anti-discrimination laws and the jurisdiction of the Massachusetts Commission against Discrimination (MCAD). That includes the requirement to have a sexual harassment policy issued to all new employees at the time of hire and to all employees annually.


All employers with 15 or more employees are subject to the federal Civil Rights Act and the Americans with Disabilities Act (ADA). The civil rights act is similar to the Massachusetts anti-discrimination law, providing legal protections to individuals based on their protected-class status, which includes categories such as race, sex, religion, and national origin.  The ADA prohibits discrimination against employees and applicants based on disability, perceived disability and having a record of disability.


Two key federal laws kick-in when an employer has 20 or more employees. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires an employer to offer each separating employee who is on its health insurance the opportunity to continue coverage at the employee’s expense for up to 18 months. The other law, the Age Discrimination in Employment Act offers legal protections to all employees 40 years old and older.


Several key laws cover all employers with 50 or more employees. The federal Family and Medical Leave Act (FMLA) offers job-protected leaves of absence to eligible employees in certain circumstances. The Massachusetts Small Necessities Leave Act (SNLA) provides eligible employees up to three days of leave to participate in a variety of family related activities.

Fifty employees will also be the magic number for many companies under federal health care reform.

Employers with 50 or more full-time or full-time equivalent (FTE) employees that do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees may be subject to a shared responsibility payment if at least one of their full-time employees receives a premium tax credit in an Affordable Insurance Exchange, or Marketplace. For the purposes of these provisions, a full-time employee is one who is employed an average of at least 30 hours per week.

And those are just a few of the federal and state laws that may impact your business. Many come with significant penalties for non-compliance so it is vital that you remain abreast of new developments. You otherwise risk forgetting to post a required poster, to issue a required policy or to follow a prescribed practice.

 If you would like more details about the small business reference guide and the myriad of other applicable laws, please contact AIM through our website or at 1-617-262-1180.

Topics: Small Business, Employment Law, Human Resources

Treasurer: Banking Partnership Frees Credit for Small Business

Posted by Christopher Geehern on May 17, 2011 11:28:00 AM

Editor's Note: The following guest column was written by Massachusetts Treasurer and Receiver General Steven Grossman.

GrossmanAs an advocate for business and industry in Massachusetts, one of AIM’s overarching goals is to improve the economic climate in the state.  To this end, particularly as the economy starts to show signs of heating up after a years-long recession, opportunities that help spur the fledgling recovery must be pursued.

When I first became Treasurer in January of this year, I wanted to take a full inventory of the potential of my new office.  The Treasury is much more than a simple clearinghouse for state finances.  I sensed opportunities to do business in an innovative way and to leverage the full influence of the office in a manner that targets valuable resources to needed areas.

We recently kicked off our Small Business Banking Partnership initiative, a program that deposits up to $5 million apiece into Massachusetts-based banks with the understanding that the banks will expand their portfolio of loans to creditworthy small businesses throughout the Commonwealth.  With more than 30 banks already on board, we are approaching our goal of dedicating $100 million to the program in its initial phase.

The funds come from existing Treasury reserves that we normally have deposited in large national or international financial institutions.  The banks participating in our program offer competitive interest rates, and our deposits are fully insured.  There is no cost to the taxpayer, no subsidy whatsoever.  The crucial difference is that more Massachusetts banks will have more money to lend to Massachusetts small businesses to help the Massachusetts economy and create jobs.

While the goals of the Partnership are ambitious, I wanted the program to be simple to administer and simple for companies to participate.  As the CEO of a 100-year-old family owned business, I knew that complexity – no matter how attractive the lending program – could deter banks from participating.  The devil can often be in the details.  We purposefully put forth program guidelines that will give us clear metrics to demonstrate that banks are using our deposits for their intended purpose, but that don’t over-burden banks with onerous, redundant, and time-consuming reporting measures or paperwork.   

The Partnership program frees up needed capital at these banks and offers credit-worthy small businesses new opportunities to borrow the money they need to prosper and expand.  This is truly a win-win partnership between business and government, a goal that I plan on replicating in many other aspects of Treasury business throughout my tenure in office.

For more information on the Small Business Banking Partnership, please contact Barbara L’Italien, Director of Government Affairs, in our office at (617)367-6900 or

Topics: Small Business, Associated Industries of Massachusetts

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