Massachusetts Revises Employer Fair Share Contribution Requirement

October 09, 2008

The Massachusetts Division of Health Care Finance and Policy has revised the “Employer Fair Share Contribution” regulation under the Massachusetts Health Care Reform Act (the “Act”). It is now more difficult for employers to meet the “fair and reasonable premium contribution” exemption from the $295 per employee fair share contribution requirement .

Under prior regulations, an employer was considered to make a fair and reasonable premium contribution to the health care of its employees if the employer met either of two tests: (1) at least 25% of full-time employees were enrolled in the employer’s group health plan, or (2) the employer contributed at least 33% to the premium cost for its group health plan for its full time employees that work at least 90 days. Effective as of January 1, 2009, any employer with more than 50 full-time employees in Massachusetts must meet both of the foregoing tests or ensure that 75% of its full-time employees are enrolled in its group health plan. The tests remain the same as they were under the prior regulations for employers with 50 or fewer full-time employees. In light of this change, all employers with 50 or more full-time employees in Massachusetts should, prior to January 1, 2009, review their plans to determine whether they qualify for the exemption from the $295 fair share contribution.

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