Health reform penalties to increase - Boston Business Journal:

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That number is expected to grow from arouned 885 companies penalized last year to morethan 1,100 in 2009. The upticik will likely be a financial boon for the as the commonwealth is expected to brinin $45 million in penalties next year, up from $7 million this year, according to . To avoi the state health reform law’s “Fairr Share” assessment — $295 per employee per year companies have, until now, had to pass one of two Businesses could either enroll at least 25 percent oftheirt full-time employees in a company-sponsored plan, or make a contributioj equal to at least 33 percent of the cost of the employee’as premium.
Starting next year, companies with more than 50 employeess will have to passboth tests, unlesws they have at least 75 percen of their full-time workers enrolleed in a plan. Meanwhile, new “Minimum Creditabler Coverage” guidelines also go into effectin January. Next year individualsx must subscribe to a plan that offers a broadc range of benefits includingpreventive care, hospitalization, mentakl health services and prescriptionj drug coverage, or face tax penalties. , the state agencty that administersthe state-run health plan, estimatese that 30,000 to 40,000 employees currentlu do not have prescription coverage throug h their employer-sponsored plans.
Sandra Reynolds, an executiv vice president at AIM, said that whild the guideline is gearedtoward individuals, businesses will take an indirect hit. “Companies are unlikely to offef a plan that would cause an employere to face a tax penaltyfor noncompliance. It woulde hurt recruitment and retentiontoo much.” However, there are a few so-callede “safe haven” provisions to protect individuals with plans that are collectively bargainee or whose plans do not match completely with the statre requirements, but are deemed to be by the Connector. Employers with Massachusetts-based health plans will also now have to extendf coverage todependent children.
Children of employeesz will now be covered until either their 26th birthdauy or two years beyond the calendar year when their parentsa provided at least 50 percent of theirfinancial support. Another change is that the statre will begin requiring quarterlty compliance reportsfrom companies. Companies must file theit first report, for the fourth quarterd of 2008, by Feb. 15. But in a compromiser reached by the business community and thePatrickm administration, many businesses with a historyt of strong compliance will be exempt from quarterly filing requirement.
Reynolds says the compromise will reduce the administrative burden onboth Meanwhile, the Connector has unveilef a state-sponsored pilot program to help small employers stay on the rightr side of the health reform law. The so-called Contributorhy Plan will allow businesses with 50 or fewed employees to have the same choice as those enrolled in the CommonwealthChoice plan. Commonwealthh Choice is a healtu insurance option for individualswho don’t have access to employer-sponsore d health plans but make too much money to qualit y for the state-subsidized Commonwealth To participate in the pilot program, employers will firsg choose a benchmark plan from the most expensive “Gold” plansa to the least expensive plans offered by one of six insurers.
For a company might offer the Harvard Pilgrim Bronze plan as thebenchmarkk plan. The company will pay at least 50 percengt toward thebenchmark plan. However, an employew may choose a different insurer’s Bronzr plan. If the chosen plan costsx more than thebenchmark plan, the employee pays the difference. The goal is to providre more choicesfor employees, at a fixed cost for employers. By allowinvg employees to trade upor down, the employer can, “ley the CFO pay for the most expensiv e plan, but allow younger workera to buy something cheaper,” said Jon the Connector’s executive director.
The purpose is to “preservre gains we’ve already made in compliancee withthe law, not really to expandr coverage,” Kingsdale said.