Are Employers Paying their Fair Share?

The state’s health coverage law says companies must make a fair and reasonable contribution to employee health coverage or pay a yearly $295 fine for each worker. The current definition of fair and reasonable is:

1) enrolling at least 25% of full time workers in a company health plan
or
2) offering to pay at least 33% of the premium for full time workers

The Patrick administration is proposing to change the "or" to "and." Health and Human Services Secretary JudyAnn Bigby says the change will bring in closer to the $45 million the employer fine was expected to raise when the law passed.

"We’ve only collected between 6 and 7 million dollars and we think the way the rule was implemented didn’t take into account that this was not a reasonable test."

Associated Industries of Massachusetts President Rick Lord counters with three arguments.

"There really was no analysis to support that ($45 million) number. This was never supposed to be a significant component of financing for health reform; and employers in Massachusetts are already paying their fair share."

Retailers Association of Massachusetts President Jon Hurst says the change would backfire.

"We are going to reach that point where employers will make the decision to drop coverage and pay the tax ($295/worker/year). This probably marks the beginning of the end of biz support for health care reform in Massachusetts."

This rule change is part of a 130-million dollar package of increased fees for employers, providers and health insurers that Governor Deval Patrick proposed to match rising consumer health coverage expenses. Greater Boston Interfaith Organization President Hurmon Hamilton applauds the Governor and urges business groups to stay at the table.

"I realize that this may be tough for companies given the context. But it is tough for consumers too. So I'm confident that the business community will weather the storm here and that their commitment to health reform is deeper than the momentary stress they are feeling here."

The hearing on the proposed changes in regulation is September 5th. The new regulation would take effect on October 1st.