An Opportunity for Meaningful Healthcare Reform: The Challenge Ahead
By Brian Gilmore, Executive Vice President, Associated Industries of Massachusetts, [email protected]
Now that the healthcare reform bill recently passed in Massachusetts is off the front-page news, lawmakers and regulators face the significant challenge of promulgating regulations to spell out the details of this new law. In Associated Industries of Massachusetts’ view, this next phase of reform will be equally important to passage of the law, if not more so, in determining the impact this bill has on the employers of the Commonwealth.
AIM played a key role in enactment of the bill – testifying at the public hearings, coordinating meetings with various stakeholders, discussing the details with key legislative and executive staff, and providing much-needed feedback on the practical implications of the bill’s provisions on businesses. We also were instrumental in getting the onerous payroll tax provision deleted from the final bill. In fact, AIM was one of the first, if not the first business organization out of the gate to criticize the payroll tax and point out its flaws.
Recognizing the House’s commitment to including an employer responsibility component and working to stave off a ballot initiative that would put the issue of the payroll tax before the voters in November, AIM worked with other business leaders to craft a compromise that would not be overly burdensome on employers and that did not accept the premise that it is the responsibility of every employer to provide health insurance to all of their employees.
A Question of Legal Obligation
AIM’s position throughout the process has been that there should be no legal obligation on the part of employers to provide health insurance because health insurance is part of a total compensation package, the scope of which is best determined on a company-by-company basis. We were successful in holding the line in that regard. The new, fair share assessment is far more targeted. It begins to address the inequity of financing the free care received by those individuals without insurance.
Presently, Massachusetts employers who offer health insurance benefits to their employees pay $160 million in a surcharge (equal to $62 per employee for insuring employers) to cover some of the cost of the state’s uncompensated care pool – a mechanism for reimbursing hospitals that provide a disproportionate amount of free care to the uninsured. Companies that do not offer insurance escape that surcharge entirely. The healthcare reform law subjects noncontributing employers to a $295 assessment based on free care provided in hospitals, doctors’ offices, and community health centers. To escape the assessment, a company must offer a group health plan and make a fair and reasonable contribution.
Who’s Covered?
Sounds simple enough, doesn’t it? However, the law does not define "fair and reasonable contribution." Despite what the business leaders clearly understand to be the intent, it is unclear from the statutory language whether the offering must be made to just some employees, to all full-time employees, or to all employees. (It applies only to companies that offer no insurance to any of their employees per our understanding as one of the key negotiators.) These are just a few of the unanswered questions or points of clarification that will be determined by regulation.
Despite the media focus on the fair share assessment, there are many other provisions in the law affecting the employer community, including the requirement that all companies with more than 10 employees establish a IRC Section 125 plan to enable employees to purchase health insurance individually with pre-tax dollars or face a free rider assessment, and an annual Health Insurance Disclosure form that employers and employees must complete.
What’s Next? AIM will play a key role in implementation of this bill. We have already begun the process of educating our members about the numerous provisions contained in the bill by hosting a series of forums around the state with senior Romney administration officials. We have offered several changes to the bill that will be included in a technical corrections piece of legislation filed in the next few weeks. We will actively participate in the regulatory process as it moves forward by offering testimony at the hearings, by organizing the business leaders to make sure the employers’ voice is as loud as that of the providers and the healthcare consumer advocates, and by providing the input necessary to make this bill work for AIM members.
AIM will hold a series of healthcare briefings:
May 16, Taunton, MA, 8-10am
May 19, Burlington, MA, 8-10am
May 23, Chicopee, MA, 8-10am
May 25, Boston, MA, 8-10am
For more information, contact AIM at (617) 262-1180.
———
Brian Gilmore is Executive Vice President of Public Affairs at the Associated Industries of Massachusetts. He can be reached at [email protected].
