The Clock Is Ticking – Employers’ Healthcare Reform Compliance Deadline Looms
June 15, 2007
Starting July 1, 2007, the Massachusetts Health Care Reform Law takes full effect, and all businesses will have to comply with it. The law affects various size businesses in different ways and will have a significant impact upon the health care benefits employers must offer their employees. The goal of the legislation is to create an opportunity for access to health care coverage for a larger range of employees. While some elements of the Massachusetts Health Care Reform Law took effect in 2006, there are certain aspects of the law slated to take effect this summer.
The MA Health Care Reform Law is far reaching, and there are numerous requirements for employers of different sizes. For example, the law will require an employer with 11 or more full time employees to ensure that least 25% of its full time employees are covered by an employer sponsored plan or some other qualified plan (such as a spouse’s,) or pay at least 33% of employee’s premiums for health coverage. The law requires employers to offer a Section 125 plan that uses pre tax dollars for health insurance premiums and also permits employees with dependents up to age 26, or for 2 years after the dependent loses IRS dependent status, (whichever comes first,) to access employer sponsored plans, regardless of their “student status.” Finally, the law mandates that employer contributions to the health insurance premiums do not discriminate in favor of highly compensated employees.
The law imposes three new employer responsibilities. The first responsibility requires employers to permit employees to pay for health care coverage with “pre tax” dollars. Known as a “Section 125 Plan,” or “Cafeteria Plan,” this responsibility does not require employers to provide health care coverage to employees, but it does require employers to disclose their Section 125 Plan with the Commonwealth Health Insurance Connector. The Cafeteria Plan requirement takes effect July 1, 2007 and applies to employers with over eleven (11) employees.
The second responsibility requires employers…
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by: Kevin V. Maltby, Esq.
June 11, 2007