"Keeping the 'Fair' in Fair Share" by Senator Richard T. Moore

The opposition to asking more of those businesses who still aren’t paying their “fair share” of employee health insurance, to contribute to the costs of health care is, indeed, puzzling. More than 90% of Massachusetts businesses are, and have been, providing health care coverage to their employees. It isn’t fair for them to be asked to continue subsidizing the other businesses – including some competitors – who fail to do their part. Yet, in opposing reasonable “Fair Share” contribution rules, leading business organizations appear to be undercutting the positive efforts of many of their own major members.

If a small portion of businesses continue to get away with shifting the cost of their uninsured workers to others – including the substantial portion of businesses who help cover the uninsured through the Safety Net Care assessments, as well as paying for their own employees, how will Massachusetts support universal coverage? The businesses that already pay the Safety Net Care assessments got a hint when the state approved recently a supplemental budget that provided “one-time” increases to those assessments. Let’s remember that the “fair share” contributions were considered a more reasonable solution to funding health reform than an across-the-board payroll tax.

If some businesses continue to enjoy avoidance of the “Fair Share” contribution, those who already pay for employee health insurance will be faced with closing the gap.

The Patrick Administration’s proposed changes to the Employer Fair Share Contribution regulations governed under M.G.L. c. 149, §188(a) deserve to be implemented! When the legislature, supported by a wide-ranging coalition, originally drafted and negotiated the terms of the Chapter 58 Health Care Reform Act, our intent was to equalize the burden of expanding health care access among all employers. The regulations that were implemented shortly thereafter failed, however, to effectively represent the intent of this historic health reform funding compromise, and the impact of that failure is evident in the underperformance of revenue generated from employer contributions. Now that we can assess the true impact of the Fair Share Contribution regulations as implemented under the Romney administration, we can see that our employers have not met the contribution goals that we had anticipated, and it is crucial, now more than ever, to make sure that employers put forth as much as all other stakeholders are being asked to do. These new regulation amendment proposals do not demand anything more of our employers than was expected of them at the outset.

In July of 2006 I wrote to then-HCFP Commissioner Amy Lischko, a letter assessing the proposed draft regulations at that time. In that letter I stressed that it was not the intent of the legislature to exempt employers from the fair share contribution if they simply “offered” insurance to their employees. My proposal at that time (and as it still remains) was that that primary and secondary test be combined so that not less than 25% of employees must be enrolled in the employer’s plan and the employer must contribute to the plan. In addition, I stated clearly that “my recollection of the Legislature’s discussions on defining a ‘fair share employer’ was that employers would be expected to contribute at least fifty percent of the premium cost.”

In fact, at the time of the negotiations (which included leaders of the business community) that ultimately helped forge the historic compromise dropping the House proposal for a business tax, legislative leaders were assured that no Massachusetts insurance company would write a group health insurance policy with less than fifty percent participation by employees and that employers generally contributed above fifty percent of the cost. In fact, the average employer-sponsored health insurance package in the state includes seventy-two percent employer contributions. Therefore, it seems unfair to the ninety percent or so of employers in our Commonwealth who have been providing health insurance for their employees to let a small percentage coast along not paying their fair share. I continue to support my proposal to require at least a fifty percent contribution by employers in addition to a fifty percent participation rate by employees. While the current proposed amendments stop short of increasing the contribution and participation rates, I applaud your efforts to continue to move us in that direction.

Originally, we had anticipated $45 million dollars in revenue from the Fair Share Contribution, but the state has only received $7.4 million. This discrepancy in numbers leads me to believe that employers are getting off for less than what was originally bargained for. At this point in time, we are not requesting that the employers pay anything more than what they had agreed to when the Health Care Reform bill was signed into law. These new regulations anticipate an influx of $33 million dollars in revenue, which would bring us much closer to what we had originally calculated into the equation as far as shared employer responsibility. The low-income recipients of CommCare have been asked to pay more, and so have hospitals and health plans. It is crucial that all stakeholders contribute equally in order to ensure the continued success of Health Care Reform.

Senator Richard T. Moore
Co-Chair, Joint Committee on Health Care Financing