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One of the basic tenets of the Massachusetts health care reform law was “shared responsibility” among individuals, employers and government. Our law placed several new requirements on employers such as: setting up Section 125 plans for all employees to enable them to purchase health insurance on a pre-tax basis, expanding dependent coverage up to the age of 26, and the imposition of a $295 annual assessment on employers who fail to make a “fair and reasonable” contribution to their employees’ health insurance. In the past few months, some policy makers have called for additional financial contributions from the business community, particularly in light of a potential funding shortfall next fiscal year if the number of people enrolling in state subsidized health insurance (Commonwealth Care) continues to rise above expectations.
Two months ago, the Massachusetts Association of Health Plans released a survey of its members which more fairly documented the true financial commitment by employers in health reform.
The survey of 11 health plans doing business in Massachusetts revealed that during 2007, the number of employees enrolled in their employers’ health insurance plans increased by 85,000. Even by conservative estimates, this represents an additional annual $250-$300 million commitment by employers. Much of this increased enrollment was not unexpected, as we always knew that in the pre-reform days there were many individuals who were offered health insurance by their employers but turned down the coverage for a variety of reasons. With the state’s individual mandate, many of these employees are now accepting their employers’ insurance coverage to avoid paying a financial penalty. It is important to note that this increased employer-sponsored coverage in Massachusetts comes at a time when it is actually decreasing in most other states.
As the representative on the Connector board for the business community, I feel it is extremely important that we all understand and appreciate the existing major commitment by Massachusetts employers in providing health insurance to their workers. The conversation about new employer assessments is particularly troubling since the Legislature is also poised to enact $400 million in new corporate taxes, which will certainly impair our state’s business climate and raise the overall cost of doing business here. As the state and nation hover on the brink of recession, we must be especially mindful of new burdens on the business community which could seriously threaten employment stability and growth.
Richard C. Lord
President and CEO, Associated Industries of Massachusetts
This program aired on May 23, 2008. The audio for this program is not available.
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