By Rick Lord
Associated Industries of Massachusetts (AIM) and its 4,000 member companies last week called upon the Legislature and Gov. Charlie Baker to end to the two-year assessment imposed on employers last year to close a financial gap at the state’s MassHealth insurance program for low-income residents.
AIM believes the assessment is no longer necessary because employers last year paid tens of millions of dollars more than anticipated under the levy. Businesses are on track to contribute some $519 million by the time the assessment sunsets at the end of this year instead of the $400 million envisioned under the 2017 legislation.
At the same time, enrollment in MassHealth has fallen as the Baker administration has initiated steps to ensure that only people eligible for benefits receive them. And state tax collections have exceeded targets over the past several months, putting the state on firmer financial footing.
“The conditions that led to the imposition of the surcharge no longer exist. Employers who have paid hundreds of millions of dollars in assessments believe it is fair to look at ending the surcharge in year two,” said John Regan, Executive Vice President of Government Affairs at AIM.
The Legislature passed the assessment in July 2017 minus a set of structural reforms proposed by Gov. Baker to place the MassHealth/Medicaid program on a firm financial footing. The assessment fell most heavily upon companies in which employees elect to use MassHealth rather than the employer-sponsored health plan.
An existing assessment called the employer medical assistance contribution increased from $51 to $77 per employee. Employers also were required to pay up to $750 for each worker who receives public health benefits.
Employers may request a waiver from the fees if they prove a hardship. Of 246 such waiver requests, administration officials said they have allowed 99.
Gov. Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80% of full-time worker equivalents did not take the company’s offer of health insurance, and that did not make a minimum contribution of a $4,950 annual contribution for each full-time worker. That proposal encountered significant opposition from the business community.
AIM member employers are proud to lead the nation in providing healthcare coverage to their employees. Sixty-five percent of Bay State companies offer health-insurance coverage to their workers, compared with 56% of employers nationwide. A full 100% of Massachusetts employers with 200 or more employees offer coverage.
Employers stand ready to work with policymakers to make long-term structural reforms to both the MassHealth program and the commercial insurance markets to make the financing of healthcare for Massachusetts residents sustainable.
Rick Lord is president and CEO of Associated Industries of Massachusetts.