The the goal of the Massachusetts Health Care Reform law is to reduce the number of uninsured residents by increasing the availability of affordable health insurance. To meet its goal, the law specifies responsibilities for employers, individuals, health insurers and state government. MIIA is monitoring the implementation of this law and will be informing members of new requirements as they become known. Regulations governing the implementation of some aspects of the law are still in development. We recommend that members visit this site and review a few other web sites where applicable regulations and guidance can be found and where updates will be posted. They are the web sites of the Commonwealth Connector and the Massachusetts Division of Health Care Finance and Policy.

• http://www.mahealthconnector.org/
• http://www.mass.gov/dhcfp/

Fact sheets on relevant topics can be found using the "Jump to topic..." navigation tool above. Also please read below to learn more about the impact of the new law on dependent coverage.

The Massachusetts Department of Revenue has developed a new interactive virtual tour to guide taxpayers through the process of filling out the new Schedule HC (Health Care) on their 2007 taxes. We are posting the link here for your convenience. http://www.mass.gov/dor

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Fair Share Requirement - Fact Sheet - ER 1

1. Under the Health Care Reform law, employers with 11 or more FTEs are required to contribute a “fair and reasonable” amount towards their employees health insurance. (See M.G.L. c. 149, Section 188(d))

2. How does an employer determine whether they have 11 or more FTEs?

a. The Department of Unemployment Assistance (DUA) issued final regulations to implement this provision. (See 430 CMR 15.00)
b. Full-Time Equivalent is defined as equaling 2000 payroll hours. Therefore, the minimum threshold for being required to comply with the law is 22,000 payroll hours (2000 X 11)
c. The DUA regulations define an applicable base period as being between October 1 – September 30 of each year.

3. What is a “fair and reasonable premium contribution”?

a. The Division of Health Care Finance and Policy (DHCFP) issued regulations in October 2006 defining a “fair and reasonable premium contribution” as a two part test. (See 114.5 CMR 16.00)
b. Primary test: if at least 25% of its employees enrolls in its group health plan, the employer meets the test. The calculation has been simplified to minimize the burden on employers.

i. Calculation of enrolled employees: Employer will take “snapshot” headcounts of the number of full time employees enrolled in the employer’s group health plan and total number of employees as of the last day of each quarter of the determination year (last days of December, March, June and September). If average number of enrolled is at least 25% of average total number of full time employes, the employer will pass the primary test.
ii. The full time employee definition has been revised to be the lesser of the number of hours per week an employee needs to work to qualify for health insurance or 35 hours per week.

c. Secondary Test: If percentage of enrolled employees is less than 25%, but the employer pays at least 33% of the premium cost of any Group Health Plan, the employer will meet the test.

4. What if the employer does not meet the test?

a. Generally, the employer must pay a per-employee Fair Share Contribution of up to $295 annually.
b. Actual calculation is based on a formula set in the regulations.

5. How does an employer report its compliance to the State?

a. Employers are required to file an annual report with the State between October 1st and November 15th of each year.
b. Forms are to be filed with DUA. DUA has developed a web-based on line application for employers to use to file the report. Employers must file individually (e.g., can’t do as part of a payroll service).
c. DUA will do a mailing prior to October 1st to employers that it believes may have 11 or more FTEs based on its Unemployment Insurance filings. Any employer who receives a notice will be required to file a form with DUA.
d. Employers with 11 or more FTEs are required to file the form whether or not they receive such a notice from DUA.
e. The form will incorporate the requirements of the Health Insurance Responsibility Disclosure Form (HIRD) so that employers only need to file one form. DUA will share the employer's responses with the DHCFP.
f. During the beginning of November, the state released an alternative filing method for local governments that have adopted MGL c. 32B (or for Worcester County, 32A). These employers can meet the fair share contribution by certifying that they’ve adopted 32B by adopting the FSC 32B Certification Form and completing a special HIRD for cities and towns which can be found at www.mass.gov/dhcfp.

6. Is there anything else an employer needs to do if they provide health insurance?

a. Yes – an employer (or its contractor) must issue to its employees a written statement of health coverage for those employees who take the employer’s health insurance.
b. The statement must be provided annually, on or before January 31.
c. The employer must also provide this information to the State.
d. BCBSMA will be sending out these written statements for all MIIA accounts.

7. How does an employer pay its Employer Fair Share Contribution to the State if it does not meet the “fair and reasonable” test?

a. Employers will be required to calculate the amount they owe based on DUA regulations.
b. Employers may pay their fair share contribution to the state by November 15th or choose a semi-annual or quarterly payment schedule with due dates established by DUA regulation. Payment must be made through an electronic funds transfer, using an ACH debit process. (More information on this will be available at a later date).
c. If the employer fails to pay any portion of the fair share employer contributions due, DUA will assess a penalty of 12% per year from date due until actually paid.
d. If an employer pays too much, the employer will be due a refund from the Commonwealth Care Trust Fund.
e. An employer may appeal to DUA.

8. Employers remain responsible for paying their Unemployment Health Insurance Contribution regardless of whether or not they meet the fair and reasonable premium contribution test.

9. To contact DUA with questions about the Fair and Reasonable Contribution, call the DUA Fair Share Contribution Unit at 617-626-6080.

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Section 125 Plan Requirements - Fact Sheet - ER2

1. Under the Health Care Reform law, employers with 11 or more FTEs are required to establish a Section 125 plan by July 1, 2007. The Commonwealth Health Insurance Connector Authority (Connector) is responsible for oversight of this requirement and has issued regulations.

2. How does an employer determine whether they have 11 or more FTEs?

a. The Connector has issued regulations describing the calculation. It is the same calculation as is used by DUA and DHCFP.
b. Full-Time Equivalent is defined as equaling 2000 payroll hours. Therefore, the minimum threshold for being required to comply with the law is 22,000 payroll hours (2000 X 11)
c. The Connector regulations base the requirement on an April 1 – March 31 time period. Employees that have been employed for less than one month are not included in the count.

3. What is a Section 125 Plan?

a. It is a benefit plan that employers may offer under federal tax law that allows employees to pay for health care coverage (and other qualified benefits) on a pre-tax basis. Participating employees’ premium contributions are not subject to state, federal or federal FICA withholding taxes. The resulting tax savings could be as much as 40% of the premium cost. Employers also save on FICA taxes.
b. Municipalities may establish Section 125 Plans under the federal law and fall within the state requirements to do so.
c. A municipality is not required to establish a Section 125 Plan if it provides 100% premium coverage to all of its employees.

4. What does a Section 125 Plan have to include in order to comply with the state law?

a. The Plan must be, at minimum, a “premium-only plan” that allows employees to pay for or contribute to the cost of health care coverage on a pre-tax basis.
b. The Plan must offer eligible employees access to one or more health care coverage options.
c. Employers do not need to contribute to the cost of health care coverage options available under the Plan.
d. Under the Health Connector regulations, one or more of the following classes of employees may be specifically excluded from eligibility to participate in an employer’s Section 125 Plan:

i. Employees who are less than 18 years of age
ii. Temporary Employees
iii. Part-time Employees working, on average, fewer than 64 hours per month for an Employer
iv. Student Employees who are employed as interns or as cooperative education student workers
v. Wait Staff, Service Employees, or Service Bartenders who earn, on average, less than $400 in monthly payroll wages

e. If an employer already has a Section 125 plan, it does not need to establish a second plan, but may need to amend its plans to meet the law’s requirements. An employer may choose to establish a second plan.
f. An employer will be required to withhold contributions from employee paychecks and may be required to remit contributions monthly to the Connector or the employee’s health insurer. Employers are not responsible for employee shortfalls.

5. How does an employer establish a Section 125 Plan that meets federal requirements?

a. Section 125 of the Internal Revenue Code requires a written Plan Document that must be adopted by the employer on or before the date the Plan is effective.
b. The Plan Document must contain the following:

i. Description of the benefits that may be elected
ii. Eligibility rules
iii. Method, timing and irrevocability of participant elections
iv. Manner of any employer contribution
v. Maximum amount of employer and employee contributions under the plan
vi. The Plan Year

c. Federal law does not contain any specifics about how to adopt a Plan. Municipalities may adopt a resolution in the same way they vote to establish other plans (e.g. vote of City Council; town meeting; etc)
d. Once adopted, the written Plan Document is usually signed by an officer or other individual who has authority to sign benefit plan documents.
e. There is no requirement to file the Plan Document with the IRS or any other federal agency. Additionally, the IRS currently does not issue rulings or determination letters indicating whether an employer’s Plan satisfies the federal Section 125 Cafeteria Plan requirements.

6. Are there any requirements for employee participation?

a. An employee must affirmatively enter into a salary reduction agreement with their employer, confirming that he/she wishes to pay for health care coverage on a pre-tax basis.
b. Federal regulations require that employee elections must be made prospectively:

i. during an annual open enrollment period
ii. within a specified period of time following date of hire, or
iii. the date an employee first becomes eligible under the plan

c. An employee is not required to participate in his/her employer’s Section 125 Plan.

7. How does an employer show compliance with establishing a Section 125 Plan?

a. An employer will be asked to provide information on Section 125 plans as part of its combined Fair Share Contribution (FSC)/Employer HIRD filing.
b. The Connector does not require employers to file plans with the Connector.
c. The Connector may request an employer to submit a copy of its Section 125 plan at any time, however. If the Connector makes such a request, the employer must provide a copy of the Section 125 plan to the Connector within 7 business days.

8. What happens if an employer fails to establish a Section 125 Plan?

a. If an employer does not establish a Section 125 Plan, the employer may be assessed a surcharge for State Funded Health Costs incurred for its Employees or Employee Dependents not offered participation in a Section 125 plan.
b. This surcharge is known as the “Free-Rider” Surcharge. For more information see the Fact Sheet regarding "Free-Rider Surcharge."

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Free-Rider Surcharge - Fact Sheet - ER3

Under the Health Care Reform law, employers with 11 or more FTEs may be assessed a surcharge if the employer:

a. Does not establish a Section 125 Plan (as described in Fact Sheet ER2); and
b. Its employees or dependents receive health care paid for by the Uncompensated Care Pool or Health Safety Net Trust Funds.

2. How does an employer determine whether they have 11 or more FTEs?

a. DHCFP emergency regulations define an employer based on a 2000 hours per year per employee. These requirements are consistent with the definition of FTE promulgated by DUA and the Connector.

3. When is an employer subject to the free-rider surcharge?

a. An employer who has failed to establish a Section 125 Plan will be required to pay a surcharge if its employees or dependents receive services through the Uncompensated Care Pool or Health Safety Net Trust Funds of at least $50,000.
b. Receiving services means having at least 3 visits per employee or dependent that are paid through the Uncompensated Care Pool.
c. Exceptions:

i. An employer is not subject to the surcharge if it is the signatory to or obligated under a negotiated, bona fide collective bargaining agreement that governs the employment conditions of the employee
ii. An employer is not subject to the surcharge if it participates in the Insurance Partnership program.

4. How will the state determine if an Employer’s employees used the Uncompensated Care Pool?

a. The DHCFP will match the claims paid through the Uncompensated Care Pool to Employers using all available data.
b. Examples of sources of data include an employee’s application to the Pool, the provider claim or Emergency Room Bad Debt Form, the HIRD Form, Office of Medicaid data, and data from the Department of Revenue and the Division of Unemployment Assistance.

5. How will the surcharge be calculated?

a. Employers will be required to pay a percentage of the cost based on their size and the amount of claims to the Uncompensated Care Pool made by their employees or dependents.

State Funded Costs	11-25 Employees	26-50 Employees	>50 Employees
$50,000-$75,000	20%	50%	80%
$75,001-$150,000	30%	60%	90%
Over $150,000	40%	70%	100%

b. DHCFP will notify employers at the end of a fiscal year of their surcharge liability. The notice will provide the employer with the calculations used to arrive at the liability and the due date for payment.
c. The employer may seek a review of the liability only if it can document that an individual identified was not one of its employees or dependents or if it can document that it established as Section 125 plan or is otherwise exempt.

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Health Insurance Responsibility Disclosure (HIRD) - Fact Sheet - ER4

1. Employer HIRD Form: Under the Health Care Reform law, an employer with 11 or more FTEs is required to file information about its compliance with the requirement to adopt and maintain a Section 125 Plan and its contribution to group health insurance. Each employee of an employer with 11 or more FTEs that declines an employer’s offer of health insurance or declines to use a Section 125 Plan is required to sign an Employee Health Insurance Responsibility Disclosure (HIRD) Form.

2. How does an employer determine whether they have 11 or more FTEs?

a. For the purposes of determining whether an employer is required to complete a HIRD, the employer must have 11 or more FTEs for the period between October 1 and September 30.
b. FTEs are based on 2000 hours. No individual employee accounts for more than 2000 hours for the purposes of the calculation.

3. What information is an employer required to report?

a. Legal Name
b. Employer DBA Name
c. Employer FEIN
d. Division of Unemployment Assistance Account Number
e. Whether the Employer adopts and/or maintains a Section 125 Cafeteria Plan in accordance with Connector requirements
f. Whether the Employer contributes to the premium cost of a group health plan for its Employees. If yes,

i. The employer contribution percentage for each employee category if the percentage varies by category;
ii. The total monthly premium cost for the lowest priced health insurance offered for an individual plan and a family plan;
iii. The total monthly premium cost for the highest priced health insurance offered for an individual plan and a family plan; and
iv. The open enrollment period of the employer sponsored plan.

4. How will an employer be required to file this information?

a. The HIRD form will be filed electronically through DUA as explained in ER1. All information required for the HIRD will be included on the Fair Share Contribution form.
b. This combination form must be filed with DUA by November 15th. During the beginning of November, the state released an alternative filing method for local governments that have adopted MGL c. 32B (or for Worcester County, 32A). These employers can meet the fair share contribution by certifying that they’ve adopted 32B by adopting the FSC 32B Certification Form and completing a special HIRD for cities and towns which can be found at www.mass.gov/dhcfp.

5. Employee HIRD form: What do employers need to do for employee HIRD forms?

a. Each employer must provide an Employee HIRD form to any employee who declines to enroll in employer-sponsored insurance or in the employer’s Section 125 plan.
b. The DHCFP has issued a HIRD, which an employer may give to its declining employees to complete. The form may be accessed at www.mass.gov/dhcfp.
c. An employer may choose to use an alternative form as long as it includes the following information and acknowledgments:

i. Employee Name
ii. Employer Name
iii. Whether the employee was informed about the employer’s Section 125 plan
iv. Whether the employee declined to use the employer’s Section 125 plan
v. Whether the employee was offered employer-subsidized health insurance
vi. Whether the employee declined to enroll in the employer-subsidized health insurance
vii. If the employee declines employer subsidized health insurance, the dollar amount of employee’s portion of the monthly premium cost of the least expensive individual health plan offered by the employer to the employee
viii. Whether the employee has alternative insurance coverage
ix. The employee must acknowledge that if he or she declines an employer offer of subsidized health insurance that he or she may be liable for his or her health care costs.
x. The employee must acknowledge that he or she is aware of the individual mandate and the penalties for failure to comply with it.
xi. The employee must acknowledge that he or she is required to maintain a copy of the signed HIRD Form and that the HIRD Form contains information that must be reported in the employee’s state tax return.
xii. The employee must indicate that by his or her signature, that he or she acknowledges the truthfulness of the answers.
xiii. The date the employee completes and signs the HIRD form.

d. An employer is required to retain the signed HIRD form for a period of three years.

i. The forms must be available for inspection and audit and must be submitted to the State on request.
ii. If an employee does not comply with an employer’s request to return the signed form, the employer must document diligent efforts to obtain the form and maintain that documentation for three years.
iii. An employer must obtain the signed employee HIRD form within 30 days of the open enrollment period or by September 30th of a reporting year, whichever is earlier.
iv. New hires must complete the form within 15 days of declining employer-sponsored health insurance and/or Section 125 Plan.
v. If an employee who enrolled in an employer-sponsored plan subsequently terminates participation in the plan, the employee must sign a HIRD Form within 30 days of the effective date of the termination.
vi. If an employer’s open enrollment period for 2007-2008 ended prior to July 1, 2007, and an employee has signed an employer form acknowledging that he or she was offered and declined employer-sponsored insurance, the employee is not required to sign an Employee HIRD until the next applicable open enrollment period occurring on or after July 1, 2007.
vii. An employer is subject to penalties for falsifying information or failing to file required information. Penalties will be between $1000 and $5000.
viii. An employer must provide a copy of each signed Employee HIRD form to the employee for use in filing the Employee’s MA tax return.

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Individual Mandate - Fact Sheet - EE1

1. Under the Health Care Reform law, every individual 18 years and older who lives in Massachusetts is required to have health insurance by July 1, 2007.

2. What type of coverage do individuals need to have to meet the mandate?

a. Prior to January 1, 2009, an individual will meet the insurance mandate if he or she is covered by any plan that is authorized by the state Division of Insurance.
b. As of January 1, 2009, an individual will meet the mandate only if the insurance coverage that an individual purchases includes:

i. Prescription Drug Coverage
ii. Hospital and emergency services
iii. Primary care
iv. Mental Health services
v. No limits on benefits, per year, per disease or injury
vi. Deductibles of no more than $2000 individual/$4000 family; some preventive services must be covered outside of the deductible. Drug deductible can be no more than $250 individual/$500 family
vii. Out-of-Pocket maximums no greater than $5000 individual/$10,000 family; excludes premiums.

c. An individual meets the individual mandate requirements if he or she is covered under:

i. Medicaid or the State Children’s Health Insurance Program (MassHealth),
ii. Medicare (whether or not with prescription drugs),
iii. Commonwealth Care,
iv. a young adult plan offered through the Connector,
v. college student plans,
vi. plans sponsored by religious groups, or
vii. federally sanctioned high deductible health plans with health savings account.

3. When can an individual enroll in Commonwealth Care or Commonwealth Choice?

a. An individual is only eligible to enroll in Commonwealth Care if he or she meets the financial eligibility requirements and does not have access to coverage through an employer.
b. An individual may enroll in Commonwealth Choice as part of a small employer plan or if the individual does not have access to insurance through an employer or the individual works for an employer with fewer than 50 employees or the individual works for an employer that has more than 50 employees but the employer does not contribute at least 33% of the cost of the coverage or provide insurance that meets the minimum creditable coverage requirements.
c. An individual may not enroll in Commonwealth Care or Commonwealth Choice if he or she has access to coverage through an employer with 50 or more employees and the employer contributes at least 33% to the cost of the premium and offers coverage that meets the minimum creditable coverage requirements. This is true even if the individual cannot afford to purchase the coverage offered by his or her employer.

4. Are there any exemptions to the individual mandate?

a. Yes – the Connector Board will adopt an affordability schedule each year by June 1. (See 956 CMR 6.00) Based on a family’s income, individuals may be exempted from complying with the individual mandate.
b. The affordability schedule for July 1, 2007 – June 30, 2008 is as follows:

Individual		Families
Income	Premium	Income	Premium
$0 - $15,315	$0	$0 - $25,755	$0
$15,316 - $20,420	$35	$25,756 - $34,340	$70
$20,421 - $25,525	$70	$34,341 - $42,925	$140
$25,526 - $30,630	$105	$42,926 - $51,510	$210
$30,631 - $35,000	$150	$51,511 - $70,000	$320
$35,001 - $40,000	$200	$70,001 - $90,000	$500
$40,001 - $50,000	$300	$90,001 - $110,000	$720

c. An individual who is not exempted from the individual mandate based on the affordability schedule may appeal to the Connector for a waiver based on financial hardship. To meet this requirement an appellant must show that he or she:

i. Was homeless, or was more than 30 days in arrears in rent or mortgage payments, or received an eviction or foreclosure notice;
ii. Received a shut-off notice, or was shut off, or was refused the delivery of gas, electric, oil, water or telephone;
iii. Had non-cosmetic medical or dental out-of-pocket expenses totaling more than 7.5% of his household’s income
iv. Incurred a significant, unexpected increase in essential expenses resulting directly from the consequences of

1. domestic violence
2. death of a spouse, family member or partner with primary responsibility for child care
3. the sudden responsibility for providing full care for an aging parent
4. a fire, flood, natural disaster or other unexpected event causing substantial household or personal damage; or

v. Can establish that purchasing health insurance to meet the mandate who have caused a serious deprivation of food, shelter, clothing or other necessities.

5. What is the penalty for failing to obtain health insurance?

a. An individual who can purchase affordable insurance in accordance with the Connector regulations and who does not do so will be assessed a penalty by the Massachusetts Department of Revenue.
b. For 2007, an individual who fails to obtain coverage will lose their personal state income tax deduction (approximately $219)
c. For subsequent years, an individual will pay a monthly penalty of up to half the cost of the premium for the least-expensive insurance.

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Eligibility for Public Programs - Fact Sheet - EE2

1. This fact sheet provides general information about eligibility for MassHealth (the state’s Medicaid and State Children’s Health Insurance Program) and Commonwealth Care. Eligibility determinations can only be made by the state agency. For an application call: 1-800-MA-ENROLL

2. Coverage for children:

a. Children are eligible for coverage in MassHealth to 300% of the FPL. Generally, access to other insurance is not a factor in determining eligibility. However, for children with incomes between 200-300% of the FPL, there is a 6-month waiting period if a family drops insurance coverage.
b. Children who are illegal immigrants are eligible for the Children’s Medical Security Plan.

3. Coverage for Parents with children 18 or younger:

a. Parents are eligible for MassHealth with incomes at or below 133% of the FPL.
b. Parents between 133%-300% of the FPL are eligible for Commonwealth Care if they do not have access to coverage through an employer and have not had coverage for 6 months.
c. Illegal immigrants and legal immigrants who have not been in the country for 5 years are not eligible for MassHealth. Illegal immigrants are not eligible for Commonwealth Care.

4. Coverage for Persons with Disabilities:

a. MassHealth provides coverage to persons with disabilities at any income level. Members are required to pay a premium based on their incomes.
b. Illegal immigrants are not eligible for MassHealth.

5. Coverage for Adults without Dependent Children:

a. Childless adults with incomes at or below 100% of the FPL who have been unemployed for more than 12 months are eligible for MassHealth.
b. Childless adults with incomes at or below 300% of the FPL are eligible for Commonwealth Care, provided they do not have access to insurance through an employer and they are not illegal immigrants.

Requirements for Employers with at least 11 Employees:

Description	Requirement	Due Dates	Contact Information
Fair Share Requirement  (Fact Sheet ER1)	Fair Share requirements are met if: 25% of employees are enrolled in the employer’s health plan, or employer pays at least 33% of premium	Compliance report due annually between 10/1 and 11/15 File electronically along with HIRD information: alternaively can file FSC 32B Certification and HIRD If non-compliant, employer must pay per-employee fee of $295, due on or before 11/15	Department of Unemployment Assistance F S C @ d e t m a . o r g
“Health Insurance 1099” (Fact Sheet ER1)	Employer must send written annual statement of coverage to employees enrolled in employer plan	On or before 1/31	BCBSMA will be sending out reports for all MIIA members
Section 125 Plan     (Fact Sheet ER2)	Employer must establish Section 125 plan for employees covered by employer plan, and for employees not eligible for employer plan (with several specific exceptions) Employer should not file copy of plan(s) with the Connector	Must be established by 7/1/07, but no enforcement until after 12/31/07 Filing process to be established at a later date. Employer is subject to “free-rider surcharge” if Section 125 plan(s) not established.	http://www.mahealthconnector.org/
Free-rider Surcharge   (Fact Sheet ER3)	Employer is subject to surcharge if employees or dependents receive services through the Uncompensated Care Pool or Health Safety Net Trust Funds of at least $50,000. Free-rider Surcharge does not apply to unionized employees	DHCFP calculates penalties annually, which are based on value of services received and number of employees.	Department of Health Care Finance and Policy (DHCFP)
Health Insurance Responsibility Disclosure (HIRD)   (Fact Sheet ER4)	Each employee who declines employer-sponsored health insurance or to use a Section 125 plan, must sign a HIRD   Employer penalties for fraud or failure to retain forms range between $1000 and $5000.	An employer must file a HIRD report by July 1 of each year. However, an employer will meet its HIRD requirements by completing a FSC filing with DUA. This on-line filing must be completed by Nov. 15th. There are special HIRDs available for those local governments that have adopted Ch. 32B. These HIRDs are filed directly with the DHCFP. An employer must obtain the signed employee HIRD form within 30 days of the open enrollment period or by September 30th of a reporting year.  New hires must sign a HIRD form within 15 days of declining.  Employees who enroll then dis-enroll must sign a HIRD form within 30 days of the effective date of dis-enrollment. Employer must retain signed HIRD forms for 3 years, and make them available for state inspectors	HIRD forms are available for employer downloading at http://www.mass.gov/dhcfp/

Requirements for Individuals Living in Massachusetts:

Description	Requirement	Contact Information
Individual Mandate   (Form EE1)	Every individual 18 years and older who lives in Massachusetts is required to have health insurance by July 1, 2007 Prior to 1/1/09 any health insurance plan approved by the Division of Insurance meets the requirement. After 1/1/09, only health insurance plans that meet minimum standards will meet the requirement. Connector has delineated exceptions to the Individual Mandate Penalties are: Year 1:  loss of personal state tax exemption ($219) Thereafter, monthly penalties valued at up to one-half the cost of the least expensive premium	http://www.mahealthconnector.org/
Access to Public Programs   (Fact Sheet EE2)	MassHealth: an individual is eligible if he or she meets the financial eligibility requirements.  Except in certain limited programs, access to employer-sponsored insurance is generally not a factor that will make an individual ineligible for MassHealth. Commonwealth Care:  an individual is eligible if he or she is ineligible for MassHealth, meets the financial eligibility requirements and does not have access to coverage through an employer. Commonwealth Choice: an individual may enroll as part of a small employer plan or if the individual does not have access to insurance through an employer (as defined by the Connector).  Individuals employed by small employers may choose to enroll in Commonwealth Choice as an individual if they decline their employer’s plan. An individual may not enroll in Commonwealth Care or Commonwealth Choice if he or she has access to coverage through an employer; this is true even if the individual cannot afford to purchase the coverage offered by his or her employer.	Call 1-800-MA-ENROLL

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Dependent Coverage Information

The Health Care Reform legislation amended Chapters 175, 176A, 176B and 176G of the General Laws to require a broadening of dependent coverage offered by health insurance carriers. Collectively, the amendments require that, on or after January 1, 2007, carriers issuing or renewing insured (premium-based) health benefit plans with dependent coverage make coverage available for persons through the earlier of the person’s 26th birthday or 2 years following the person’s loss of dependent status pursuant to the Federal tax rules. Thus, municipal employees who receive their health coverage through insured (premium-based) plans will be subject to that expanded coverage of dependents since the insurers who provide premium-based health coverage will be mandated to make that expanded coverage available.

However, the Massachusetts Division of Insurance has expressed the opinion that the new definition of dependent does not apply to self-insured health plans, including municipal self-insured plans. This is because the chapters that include the new definition apply to insurers that are regulated by the Division of Insurance, but do not apply to employers who offer their own self-insured plans. Thus, self-insured municipal plans are not presently required to extend the new definition to employees covered by those plans.

It should be noted that the Health Care Reform legislation did not amend the definition of “dependent” in Chapter 32B. Section 2(b) of that Chapter defines “dependents” as including:

“an employee’s spouse, and employee’s unmarried children under nineteen years of age, and any child nineteen years of age or over who is mentally or physically incapable of earning his own living, provided that any additional premium which may be required is paid for the coverage of such handicapped child. Said definition shall also include an unmarried child nineteen years of age or over who is a full-time student in an educational or vocational institution and whose program of education has not been substantially interrupted by full-time gainful employment excluding service in the armed forces; provided, that any additional premium which may be required for the coverage of such student shall be paid in full by the employee. The standards for such full-time instruction and the time required to complete such a program of education shall be determined by the appropriate public authority.”

It should further be noted that the Supreme Judicial Court has previously held in Connors v. City of Boston, 430 Mass. 31 (1999) (the case that challenged the provision of dependent coverage to the domestic partners of municipal employees) that the definition of “dependents" in Section 2(b) is “exclusive” and may not be expanded upon by a municipality. In accordance with the above information, the MIIA Health Benefits Trust, which is self-funded, has not expanded its definition of dependent.