October 12, 2008

Massachusetts Fair Share Requirement Relaxed?

The Commonwealth of Massachusetts has issued new regulations relating to the fair share contribution requirement. While the Massachusetts health care reform experiment does not require employers to provide, or make a contribution toward, health coverage for their employees, it does impose an annual financial fee assessment ($295 per employee) upon employers who do not.

On September 30, 2008, the Massachusetts Division of Health Care Finance & Policy issued regulations further defining what employers need to do in order to avoid the fair share contribution fee assessment. Beginning January 1, 2009:

  • Employers employing between 11 and 49 employees in the Commonwealth must either:
    • Meet the ‘coverage standard’ of 25%; or 
    • Make a fair and reasonable contribution toward health coverage of at least 33% of the premium cost of the employer-sponsored group health plan offered to all of its full-time employees (the ‘premium contribution standard’). 
  • Employers employing 50 or more full-time employees in the Commonwealth must meet both the coverage standard and the premium contribution standard (as described above); with one exception: if the employer’s plan covers at least 75% of its full-time employees, then the employer would only have to meet the coverage test, and not the premium contribution test.

For these purposes, a full-time employee is one who works the lesser of 1) 35 or more hours per week, or 2) the number of weekly payroll hours to be eligible for the employer’s group health plan.

Again, these rules take effect 1/1/09.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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