Tax Article -Recent Changes to the Massachusetts Health Care Reform Law

The Legislature recently passed a "technical corrections bill" containing several clarifications and amendments to the Health Care Reform Law, passed in April 2006.  The following article contains information about the changes that were made.

Recent changes include:

• A delay in implementation of the Free Rider Penalty, from October 1, 2006 to January 1, 2007. Employers may be exempt from this penalty as long as they offer a Section 125 cafeteria plan, have a collectively bargained contract that covers the employee who seeks free care, or participate in the Insurance Partnership Program. The Division of Health Care and Finance Policy has issued proposed draft regulations that may be changed in light of the technical corrections bill.
• Employers with more than ten employees must maintain a Section 125 cafeteria plan. This requirement becomes effective July 1, 2007.
• Employers with more than ten employees will be required to fill out a Health Insurance Responsibility Disclosure Form (HIRD) to be filed with the state, indicating whether or not they are in compliance with the Section 125 plan requirement. Any employee who declines to enroll in the employer-sponsored plan will be required to complete a HIRD form, which will be retained on file with the employer.

On October 1, 2006, the "Fair Share Contribution" became effective. Employers (of more than 11 employees) who do not make a "fair and reasonable contribution" to the cost of their employees' health coverage will be charged up to $295 per full-time employee, per year. The Fair Share regulations can be found at http://www.mass.gov/Eeohhs2/docs/dhcfp/g/regs/114_5_16.pdf

Other Information:
The Commonwealth Health Insurance Connector Authority plans to hold regional information sessions on the Health Care Reform Law. For more information, visit: The Mass Health Connector Website

Please contact Feeley & Driscoll's Boston Accounting Firm by Email or call us at 1 (888) 875-9770.

related links