On January 8, 2013, Governor Deval Patrick proposed legislation that will eliminate the penalties certain employers face, under state law, for not offering health insurance coverage to their employees in Massachusetts. The legislation would eliminate the employer “Fair Share Contribution,” effective July 1, 2013, slightly in advance of the employer “play or pay” mandate under the federal health reform law, the Patient Protection and Affordable Care Act (PPACA).
The Fair Share Contribution was established under the Commonwealth’s 2006 healthcare reform law and mandates that employers with 11 or more full-time equivalent employees make a “fair and reasonable” contribution toward the health care costs of its full-time workers, or pay a $295 assessment per full-time employee. Because the PPACA imposes its own version of an employer mandate, Massachusetts seeks to repeal its version, to avoid dueling state and federal mandates.
The repeal appears to take some Massachusetts employers off the Commonwealth’s employer mandate hook, even where they would not be subject to the PPACA mandate. For example, the federal mandate excuses employers with fewer than 50 full-time equivalent employees, while the Commonwealth’s mandate had covered employees with as few as 11 employees in Massachusetts.