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Health Reform - Fair Share Contribution ALERT!

State Proposes Expansion of $295 FSC Assessment on Employers
& Mandatory Quarterly Reporting, Filings and Payments!

Burdensome employer reporting requirements were recently expanded by the Legislature and Governor Deval Patrick in legislatively approved changes to the Fair Share Contribution (FSC) program. Also, the Patrick Administration is now finalizing companion regulatory changes to the program in an attempt to raise more tax revenue on the backs of Massachusetts employers.

As you know, under the MA health reform law, employers of 11 or more Full Time Equivalent employees (FTEs) that do not make a “fair and reasonable” premium contribution to their full time employees’ health insurance are subject to the $295 per employee assessment. Employers were first required to make this FSC/HIRD filing in November of 2007.

The state now wants YOU to report, file and pay – if you fail the tests – 4 TIMES A YEAR!

The proposed regulatory changes to the FSC include a change in the dual testing formula to determine which employers are hit with the assessment. The Patrick Administration has proposed to change the regulation to require that employers meet both tests; the 25% participation (take up) rate AND the 33% employer premium contribution for all full time employees employed at least 90 days. The current assessment is $295 per employee per year, prorated for part time employees, on those employers that do not meet the Fair Share requirement.

As a result of this change, a significantly larger number of employers are expected to be hit by the $295 per employee assessment, including many seasonal employers that are likely to appear to have more than 11 FTEs during one or two quarters of the year, despite falling below the 11 FTE threshold when employee hours are calculated on an annual basis. The old calculation used 22,000 payroll hours on an annual basis to equal 11 FTEs – the new basis will be 5500 payroll hours per quarter.

The participation test will be particularly difficult to meet, in that the regulation make ZERO allowance for those employees that already have coverage elsewhere, possibly via a spouse or another employer or on Medicare.

EVEN IF YOU OFFER YOUR EMPLOYEES GOOD QUALITY HEALTH INSURANCE, IF YOU CAN’T MEET BOTH TESTS – YOU WILL BE SUBJECT TO THE $295 TAX!

Government Affairs Committee

May 2008 Meeting Minutes
April 2008 Meeting Minutes
March 2008 Meeting Minutes

 

 

 

 

 

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