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Commonwealth of Massachusetts
In 2006, the Commonwealth of Massachusetts passed landmark legislation with the goal of covering 95 percent of its residents within three years. This new health care reform bill represents a culmination of more than a year of negotiations and compromise between lawmakers and Governor Mitt Romney (R). It includes provisions to increase access to health insurance, contain health care costs, and improve quality.
- Individual Mandate
- Requires all individuals to obtain health insurance by July 1, 2007.
- Individuals who cannot afford insurance, as determined by the Connector (see below), will not be penalized.
- Starting in 2007 income tax forms will require disclosure of insurance status for the tax year.
- The penalties for not having insurance, in the 2007 tax year, will include loss of the personal exemption.
- In subsequent tax years, the penalty will include a fine of 50 percent of the monthly cost of health insurance for each month without insurance.
- Employer Requirements
- Employers with 11 or more employees:
- who do not make a "fair and reasonable" contribution towards their employees' health insurance coverage will be required to make a per-worker contribution, estimated to be approximately $295 per full-time employee (employers with seasonal or part-time employees would pay a pro-rated amount).
- must adopt a Section 125 "cafeteria plan" as defined in federal law, which permits workers to purchase health care with pre-tax dollars by January 1, 2007.
- who do not "offer to contribute toward, or arrange for the purchase of health insurance" may be assessed a "free rider" surcharge if their employees access free care a total of five times per year in the aggregate or one employee accesses free care more than three times. The surcharge will exempt the first $50,000 of free care that the employees use. After that the employer will be charged between 10 - 100 percent of the cost to the state as determined by the Division of Health Care Finance and Policy.
- Commonwealth Health Insurance Connector Authority
- Helps individuals and small businesses find affordable health coverage.
- Allows individuals to purchase health insurance using pre-tax dollars which will reduce the cost of premiums by up to 25 percent.
- Part-time and seasonal workers are allowed to combine employer contributions.
- Allows individuals to keep their policy if they switch employers.
- Insurance Market Reforms
- Starting in July 2007, the non- and small-group markets will be merged.
- The merger will reduce premiums for people currently purchasing in the individual market by nearly a quarter of their current cost.
- Will allow HMOs to offer coverage plans that are linked to health savings accounts.
- Will allow young adults may remain on their parents' policy for two years past the loss of their dependent status, or until they turn 25, whichever occurs first.
- Subsidies
- Establishes the Commonwealth Care Health Insurance Program, which will provide sliding scale subsidies to individuals with incomes below 300 percent of the federal poverty level (FPL).
- No premiums will be imposed on those individuals with incomes below 100 percent FPL.
- The Insurance Partnership will raise eligibility for employee participation from 200 to 300 percent FPL.
Additional Information
Reactions to Massachusetts's Health Care Reform Bill
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