Health Care Reform Law
As you may be aware the Commonwealth has passed the new Health Care Reform Law. As with any new law of this size and scope, there is confusion and concern. We at MDS Insurance Services Inc. are working to communicate how this new law will affect you and your employees. As part of our effort we will be sending out occasional updates via our web site, e-mail and or regular mail. We are also planning some seminars in the upcoming near future. There are still many more questions to be answered, but a few other provisions have been established. The following is an executive summary of the key points and important dates:
The Goals of Health Care Reform Law
There are 4 primary goals:
1. To expand coverage to cover the approximately 500,000 uninsured in Massachusetts and thereby reduce the uncompensated care pool.
2. To provide a healthcare/insurance framework to satisfy the federal government's requirements thereby availing the state to $385 Million in federal funding.
3. To provide more low cost health insurance options to the buying public.
4. To provide medical data and reporting transparency to empower an educated health care consumer.
Key Terms, Numbers, and Dates:
Section 125 Plans
Every company in Massachusetts must have a 125 plan in place. Whether it is a requirement or not, Section 125 plans save companies and employees money on their insurance costs. Call MDSIS to get yours started today!
The Connector
The state agency that will coordinate the implementation of the health care reform. Agent/Brokers such as MDS Insurance Services will work with the Connector to offer companies and individuals health insurance options.
Fair Share Assessment
Employers with 11 or more employees are subject to the mandate. The financial penalty is calculated on 11plus Full Time Equivalents (FTE) and the employers must make a "fair and reasonable contribution" to health coverage. The effective date is 10/1/2006, but enforcementis more likely to be seen in 2007.
Free Rider Assessment
The surcharge is tied to employee and dependent use of the free care pool for health services. Companies that do not offer to pay or arrange for the purchase of their employees health insurance. The employer can avoid the Free Rider Assessment by offering a health insurance product and or having a Section 125 plan in place.
Health Insurance Responsibility Disclosure (HIRD)
HIRD is an administrative form to be completed once a year by all employers and employees doing business in Massachusetts. Documentation of the offer of insurance and Section 125 plans are contained in the form.
Dependent Coverage
Employers are required to cover dependents until the day before their 26th birthday or up to 2 years after the loss of dependent status, which ever comes first. The implementation date is January 1, 2007.
Key Dates:
October 1, 2006
Employers with 11 FTE or more must offer health insurance or be subject to an annual fee of $295 per employee.
January 1, 2007
Dependents up to age 26 or for two years after loss of dependent status will be covered under family plan begins.
May 1 thru July 31, 2007
Open enrollment for individuals and small groups to utilize brokers / connector health insurance products.
July 1, 2007
All Massachusetts Residents are required to have health insurance. If not, enforcement will be seen via tax codes.
July 1, 2007
Individual and Small Group insurance markets will be merged: The effect on each is still to be determined.
Have questions? At MDSIS, we're here to help. Call us today and find out how easy is can be to get the coverage you need.
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