December 10, 2008

Massachusetts: How to be MCC-Compliant

The Massachusetts ‘Commonwealth Connector” has issued guidance (Administrative Bulletin 01-08:  Guidance Regarding Minimum Creditable Coverage (MCC) Certification ) addressing how a plan can be certified as MCC-compliant.  As part of the Massachusetts health care reform project, the law requires residents to be covered by minimum creditable coverage. 

A few months ago, regulations were issued defining what ‘MCC’ means.  This requirement is imposed upon individual Massachusetts residents; it is not imposed on employers.  Employer plans do have an obligation to advise participants about whether its plan satisfies the MCC standards.  Furthermore, employers may want to ensure that their plans comply in order to help their Massachusetts employees satisfy the MCC requirements, and avoid a tax penalty. 

Generally, plans can self-certify; and it is expected that most plans will be determined to be creditable, or not creditable, without seeking approval from the Connector Authority.  However, some plans may substantially meet the requirements, but not exactly meet the requirements.  In this instance, the plan may want to request approval from the Connector Authority.  The Connector Authority will, in its discretion, determine a plan to be substantially compliant, as long as it is at least actuarially equivalent to the “Bronze-level” Connector plan. 

Employers and plan sponsors can seek MCC certification by completing an application and filing it with the Connector Authority.  The application does not require attaching an actuarial determination; however, the application process might be expedited if an actuarial determination is included. 

If a certification is granted, it will remain in force until either the plan is substantially changed, or the Connector substantially changes the MCC requirements.


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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