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Massachusetts HIRD form legislation

The once-dead health insurance responsibility disclosure (HIRD) form for Massachusetts employers has been resurrected in time for the flurry of end-of-year reporting requirements. The commonwealth’s 2006 health reform law, which served as a model for the federal ACA, required Massachusetts employers to file a HIRD form that indicated the number of full-time and part-time employees and whether the employer offered subsidized health insurance coverage. During the implementation of the ACA in 2014, Massachusetts suspended the filing requirement because it was redundant due to the employer mandate under the ACA.

What’s old is new again

An appropriations bill enacted in late 2017 mandated a new employer reporting form for 2018. The law states, “the form shall indicate whether the employer has offered to pay or arrange for the purchase of health care insurance and information about such health care insurance such as the premium cost, benefits offered, cost sharing details, eligibility criteria and other information deemed necessary by the division.”

The commonwealth recently released information for employers regarding the new form, including FAQs. The form became available on Nov. 1, 2018. Affected employers must complete the online filing by Nov. 30, 2018, (and during the filing period of Nov. 1 through Nov. 30 annually thereafter). Guess what? The form is referred to as Health Insurance Responsibility Disclosure (HIRD).

Who’s impacted?

The law applies to any employer with six or more employees in Massachusetts, whether the employer offers health insurance or not. Specifically, any employer that reported six or more employees (includes all employment categories) in any Massachusetts unemployment wage report during the past 12 months must file the form.

The HIRD reporting is administered by the state tax authorities (Massachusetts Department of Revenue or DOR) through its web portal, known as MassTaxConnect or MTC. Either the employer or its payroll vendor can file the HIRD form, although the employer is ultimately responsible for ensuring the information is provided in a timely and accurate manner.

What purpose does the HIRD form serve?

ERISA allows states to adopt programs that help pay for the cost of available employer health insurance for lower income individuals if the state deems it cost-effective. The Massachusetts program is known as the MassHealth Premium Assistance Program. The new HIRD disclosure will help Massachusetts identify persons with access to employer health insurance that may qualify for premium assistance. If a person qualifies for premium assistance, MassHealth will pay the subsidy directly to the employee.

The good news, if any, is that Massachusetts employees who qualify for premium assistance are not included in the Employer Medical Assistance Contribution supplement calculation.

Lockton comment: Qualifying for premium assistance is considered a HIPAA special enrollment event that gives the eligible employee the opportunity to enroll midyear in their employer health plan.

What are the mechanics of filing the HIRD form?

 To file the HIRD form, the employer must login to its MTC withholding account and select the “File health insurance responsibility disclosure” hyperlink under the account alerts. The website will ask questions about plan design and contribution information related to the employer plan, such as eligibility criteria for coverage, the employee monthly contribution, in-network deductible and in-network, out-of-pocket maximum.

The HIRD form asks, “Do the benefits provided under the health insurance plan satisfy the Minimum Creditable Coverage (MCC) requirements of 956 CMR 5.03(1)(a)?” To qualify, the coverage must meet specific criteria outlined by the state. However, HSA-compatible high-deductible plans are deemed to qualify if the employer allows employee pretax contributions to their HSAs. If the employees enrolled in the employer plan are receiving 1099-HCs from the plan’s insurer or third-party administrator, the coverage is MCC.

The HIRD disclosure will be more labor intensive for plans that cover multiple corporate entities with Massachusetts employees. The MTC login credentials are tied to federal tax EIN, so the employer must log into each EIN MTC account they have and complete a HIRD form for each account.

What now?

The new HIRD requirement will be one more loose end that affected employers will need to track every year. To ensure proper completion of the form, the employer (or its payroll vendor completing the form on behalf of the employer) will need to have the relevant information handy, including whether the coverage qualifies as MCC under state law.

There is an argument the HIRD reporting requirement is pre-empted by ERISA because it impacts the employer’s administration of its health plan. Most employers, however, are unwilling to be the “test case” on the pre-emption issue and will voluntarily comply.