There’s a story in the Worcester Business Journal today about a very important issue facing the state’s business community.
The issue relates to our state’s “fair share” health insurance regulations, and it’s posing a significant threat to many small businesses across our state.
Massachusetts businesses are required to offer health insurance to their employees, and rightfully so. Until several years ago, state regulations required businesses to choose to meet one of two thresholds for providing that insurance. In order to comply, businesses could choose to fund at least 33 percent of the cost of health care benefits, or they could offer insurance to at least 25 percent of their employees.
But a couple of years ago, our state changed the rules as part of the sweeping health care reform bill that we passed. Under new state “fair share” health insurance regulations, businesses must comply with both the 33 percent funding and the 25 percent enrollment requirements, or they face a penalty of $295 per employee per year.
Many business owners are having difficulty meeting both of these requirements, particularly the 25 percent enrollment requirement. One reason is that many businesses have employees who receive health insurance from other sources, such as through a spouse’s employer. Those employees are counted as part of the pool of workers used to calculate the 25 percent enrollment guideline. So, it’s theoretically possible that a business might be taxed $295 per employee for failing to provide health insurance to more than a quarter of its workers, even though it actually provides insurance benefits in good faith to all of the workers who request it.
This situation isn’t fair, and it’s the sort of bad business policy that’s making our state uncompetitive and forcing jobs elsewhere. We can’t expect companies to open their doors in Massachusetts so long as we have regulations like this one on the books that make it cost prohibitive to do business here. Job growth here in Massachusetts depends on us having sound business policies in place first.
I support our state’s interest in making sure that businesses offer health insurance to their employees sufficiently, but I believe the fair share regulations need to be amended in several ways, starting with an amendment to exclude from the 25 percent enrollment calculation any workers who receive health insurance from other sources.
What do you think? Do you support the “fair share” regulations as they are now? Or, do you agree that they should be amended to make them more equitable? Please post your comments below to let me know what you think.
