Make Sure Your Business is in Compliance With Fair Share Contribution Filing
Massachusetts State Health Insurance Legislation (chapter 58 of the Acts of 2006(enacted in April of 2006 significantly changed the obligations of Massachusetts employers. Among the provisions was the requirement for certain employers to make a “Fair Share Contribution” to the Commonwealth Care Trust Fund if they do not make a “fair and reasonable” contribution to their employee’s health care. Below is a brief refresher from the Connector about employer obligations. For additional information go to www.mahealthconnector.org.
Employers with fewer than 11 full-time-equivalent employees
• Are not required to offer health benefits or a Section 125 Plan
• May still want to set up Section 125 Plan for their employees because it will reduce taxes for both the employer and the employees
• May offer their employees health benefits and a Section 125 Plan through the Health Connector’s Commonwealth Choice program
Employers with 11 or more full-time-equivalent employees
• Must offer a Section 125 Plan that meets Health Connector regulations.
• Could be required to pay the Free Rider Surcharge if they don’t offer a Section 125 Plan and their employees (or their employees’ dependents) get state-funded medical care.
• Must make a “fair and reasonable” contribution to their employees’ health insurance or pay a Fair Share Contribution of up to $295 per employee.
• Must submit an annual “Employer Fair Share Report” to the Division of Unemployment Assistance on or before November 15.
• Must collect an Employee HIRD Form when employees decline employer-sponsored health insurance or a Section 125 Plan.
• May offer their employees health benefits and a Section 125 Plan through the Health Connector’s Commonwealth Choice program.
Employers with more than 50 full-time employees
• Are subject to all of the requirements listed above
• Are limited in what they may offer to their employees through the Health Connector’s Commonwealth Choice program. They:
• May offer the Commonwealth Choice Voluntary Plan. The Voluntary Plan is a Section 125 Plan. It lets employees who are not offered an employer-subsidized health plan buy a health plan using pre-tax dollars. This is a good option for part-time or contract employees.
• May not offer Business Express. Business Express lets small employers subsidize a Commonwealth Choice health insurance plan for their employees.
1 Go to the Employer FAQ to see how to count your FTEs for these rules.
2 For this purpose, full-time employees are those who work at least 30 hours per week and were hired with the expectation that their job would last more than 5 months.