What must employers do to be in Compliance with the Massachusetts Chapter 58 Regulations?

To satisfy these new mandates employers must develop a compliance process to identify those Massachusetts employees that are subject to the new regulations and then determine if the below requirenments apply.

• Eligibility for Fairshare Contribution
• Eligibility for Free Rider Surcharge

Fair Share Contribution

Effective on October 1, 2006 all employers with 11 or more full time employees who do not make a "fair and reasonable" contribution to employee health insurance will be required to pay an assessment. The Assessment will be calculated annually, but cannot exceed $295 per employee per year. In order to avoid this assessment, an employer must satisfy the fair and reasonable contribution tests.

Primary Test

An Employer will be determined to make a Fair and Reasonable Premium Contribution based on the percentage of Employees enrolled in the Employer's Group Health Plan. An Employer with at least 25% of Enrolled Employees, determined in accordance with the criteria below, is exempt from the Fair Share Contribution.

Calculation of Percentage Each Employer shall calculate its percentage of Enrolled Employees for the period from October 1 to September 30 each year. The percentage of Enrolled Employees is calculated by dividing the Total Payroll Hours of Enrolled Full Time Employees as defined below by Total Payroll Hours of Full Time Employees.


• For the purposes of this test, the following definitions/methods apply:
  Total Payroll Hours of Enrolled Employees The Employer shall calculate the total payroll hours for which both wages were paid and the employee was enrolled in the health plan. The sum of the payroll hours for each Enrolled Employee is the total payroll hours of enrolled employees.
  Total Payroll Hours of Full Time Employees The Employer shall calculate the total payroll hours of all full time employees.
  
  A Full Time Employee is an Employee that works at least 35 hours per week. If an Employee works both part-time and full-time during the year, only the payroll hours of the period in which the employee was full-time should be included.
  
  A Seasonal Employee is not a Full Time Employee unless the Seasonal Employee works for the Employer more than sixteen weeks during the year.
  
  A Temporary Employee is not a Full Time Employee unless the Temporary Employee works for the Employer more than 90 days during the year.
  
  An Independent Contractor is not a Full Time Employee.
  

  Secondary Test

  If the percentage calculated under the Primary test is less than 25%, but the Employer offered to pay at least 33% of the premium cost toward an Individual Health Plan for Employees that were employed at least 90 days during the period from October 1, 2006 to September 30, 2007, the Employer shall be exempt from the Fair Share Contribution.
  

Free Rider Surcharge

Effective on October 1, 2006. This provision applies to employers with 11 or more employees, who do not offer to contribute towards, or arrange for the purchase of health insurance. Employers (that are ¡§Non-Providing¡¨) are to be assessed if its employees access the Uncompensated Care Pool (UCP) a total of 5 times per year or one employee accesses the Uncompensated Care Pool 3 times in one year and the total claims billed to the UCP exceed $50,000.
The amount of the surcharge is a percentage of the cost of the care (based on number of visits and employer size). The effective date of this provision is October 1, 2006.

A Non-Providing employer is an employer that: Employs more than ten Employees and required to maintain a cafeteria plan in accordance with the rules of the Connector; and
Does not offer to contribute toward or arrange for, the purchase of health insurance for its employees, and does not comply with the requirement to maintain a cafeteria plan in accordance with the rules of the Connector.

Exemptions

An Employer is not a Non-Providing Employer if it is a signatory to or obligated under a negotiated, bona fide collective bargaining agreement that governs the employment conditions of the State-Funded Employee (an employee that access the UCP); or
Employer participates in the Insurance Partnership Program.