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State Sets Sights on Health Reform Non-Filers

State officials this week initiated enforcement action against approximately 10,000 Massachusetts employers who missed the February 15 deadline for filing fourth-quarter “fair-share” reports required under the Massachusetts Health Care Reform Law.  AIM encourages employers to confirm that their online filings have been completed and appropriately submitted to the Division of Unemployment Assistance (DUA). Late filers determined to be non-compliant with the Fair Share obligation face an additional 12 percent penalty.

DUA Director Edward Malmborg reported that of the approximately 34,000 businesses required to file for the October-December 2008 period, 24,979 have initiated the filing, 23,749 have completed it, and 371 have been found to owe a penalty due to noncompliance.

Here are some reminders of key Fair Share filing concepts, including the new compliance rules that were effective January 1, 2009:

Employers of 11 or more full-time equivalent employees (FTEs) are subject to the Fair Share Contribution obligation set forth in the Mass. Health Care Reform law, and must complete the online compliance filings regardless of whether or not they receive a filing notice from the DUA, i.e., it is the employer’s responsibility to understand and fulfill its compliance obligation. There are two Fair Share compliance “tests”:

• The “Percentage of Full-time Enrolled” test – having at least 25% of “full-time” employees enrolled in the employer’s group health insurance plan; and
• The premium Contribution Standard” test – offering to contribute at least 33% of the cost of single coverage for all” full-time” employees who have been on payroll at least 90 days.

For the quarter ending Dec. 31, 2008, all covered employers were required to complete the filing, and, for all employers, passing just one of the two Fair Share tests resulted in compliance. Filing obligations for the remainder of 2009 are determined by each employer’s individual circumstances:

• Employers that passed very easily are not required to file again for one year – for the quarter that ends 12/31/09 – and would have received notice of this at the conclusion of their filing process. Employers in this category may voluntarily choose to continue filing quarterly
• Employers that failed or that are deemed by the DUA, in its sole discretion, to be near-fails or likely-future-fails, must continue to file on a quarterly basis.

Effective January 1, 2009, the compliance rules change significantly for many employers:

• There is no change for employers of 50 or fewer FTEs – they continue to comply by passing just one of the two Fair Share compliance tests.
• For employers of more than 50 FTEs, having at least 75% of “full-time” employees enrolled in their group health plan results in automatic compliance. Having fewer than 75% of full-time employees enrolled in the employer-sponsored plan means the employer must now pass both Fair Share compliance tests in order to avoid being subject to a financial penalty.

For employers required to continue filing quarterly this year, the 45-day Fair Share filing period for the quarter of January through March 2009 is April 1st through May 15th. If you have questions about your organization’s filing status, contact the DUA Fair Share Contribution Unit at 617-626-6080.

AIM members are encouraged to direct their Health Care Reform questions to our toll-free HR Hotline (800-470-6277).