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Legal Memorandum: Fair Share Employer Contribution in MA

Issue: Under Massachusetts’ law and the ActProviding Access to Affordable, Quality, Accountable Health Care, 2006 Mass. Acts ch. 58 (the ‘Act’)and the corresponding regulations (114.5 Mass. Code Regs. 16.00, 17.00, 18.0 (proposed June 30, 2006; to be effective Oct. 1, 2006)), what financial considerationsother than the obvious cost of the premiumshould employers be aware of?

Area of Law: Employee Law, Insurance Law
Keywords: Fair Share Employer Contribution; Per employee contribution
Jurisdiction: Massachusetts
Cited Cases: None
Cited Statutes: 2006 Mass. Acts ch. 58, § 47; Mass. Gen. Laws ch. 149, § 188, 188(c); 114.5 Mass. Code Regs. 16, 16.04, 17.00, 18.0
Date: 08/01/2006

In order to equitably distribute the cost of health care provided to uninsured Massachusetts residents, each of the following employers must pay a “Fair Share Employer Contribution.”  Such an employer is one that

·         employs 11 or more full-time equivalent employees in Massachusetts; and

·         is not a contributing employer (i.e., an employer that makes a fair and reasonable contribution to its employees’ health insurance premiums).

These employers must pay a per-employee contribution, which is called the “Fair Share Employer Contribution.”  2006 Mass. Acts ch. 58, § 47 (to be codified in Mass. Gen. Laws ch. 149, § 188).

The Contribution is pro-rated by a fraction not exceeding one, the numerator of which is the number of hours worked in the year by all employees who worked for the employer for at least one month, and the denominator of which is the number of employees employed during that year times 2,000 hours.  Id.  (For further factors considered in calculating the Fair Share Employer Contribution rate, see 2006 Mass. Acts ch. 58, § 47 (to be codified in Mass. Gen. Laws ch. 149, § 188(c)).)

The Fair Share Employer Contribution will not exceed $295 per employee.  Id.  According to a proposed regulation, the amount would be the lesser of $295 per employee, or the sum of the Fair Share Employer Contribution and the per-employee cost of unreimbursed physician care (calculated under 114.5 Mass. Code Regs. 16.04).  114.5 Mass. Code […]

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