Businesses await rules for avoiding healthcare levy
State officials are expected to decide by as early as tomorrow the minimum amount businesses must pay for employees' healthcare to avoid the $295 per worker annual fee that is a key component of healthcare reform.
Business leaders have been urging the state to waive the fee for any company that offers an insurance plan, no matter how small the contribution.
Healthcare reform, signed into law in April by Governor Mitt Romney, calls for businesses with more than 10 employees to contribute a ``fair and reasonable" amount to workers' health insurance or pay $295 a year for each employee. The regulations to be issued by the Division of Health Care Finance and Policy are expected to define ``fair and reasonable."
In public testimony, written comments, and interviews, some of the state's most powerful business leaders and trade group officials said any company contribution toward employee healthcare should exempt the company from the $295 payment.
If a company offers a health insurance plan of any type, it ``should be exempt from the assessment," Jon B. Hurst , president of the Retailers Association of Massachusetts, wrote to the health care finance division. In an interview, Hurst also said part-time workers' benefits should not be a factor in determining whether a company's contribution is sufficient.
Michael Widmer , president of the Massachusetts Taxpayers Foundation, also wrote to the state in support of exempting from the annual assessment any company that provides healthcare coverage.
Healthcare reform supporters said such a definition could undercut the goal of the new law, to provide healthcare coverage to about 460,000 Massachusetts residents who now lack coverage.
``If the Legislature wrote the bill to say that any contribution exempts somebody from having to pay the assessment, that would be one thing," said Brian Rosman , director of policy at Health Care for All, a Boston advocacy group. ``Instead, they drafted the bill to say only a `fair and reasonable contribution' is enough. You don't want an employer who makes a minimal contribution to get off scot-free. It's just not what those words mean."
Amy M. Lischko , commissioner of the Division of Health Care Finance and Policy, said she expects to release draft rules tomorrow defining ``fair and reasonable."
``The law is broad and sometimes vague," Lischko said. ``The regulations are supposed to be crystal clear."
Lischko declined to comment on how she intends to interpret the law but said, ``We're taking all of the comments into account. Employers are not a homogeneous group."
The healthcare reform law includes a number of incentives and penalties intended to persuade more employers to offer health insurance, and convince uninsured residents to purchase coverage.
The law is being implemented under a tight timetable. The draft regulations released tomorrow will go through a public comment period of a couple of weeks and could be finalized in August. Low-cost and subsidized insurance policies created under the law are expected to go on sale Oct. 1. Residents who can afford to purchase insurance but choose not to will be subject to penalties -- such as loss of state income tax deductions -- starting next year.
Along the way, other state agencies and the newly created Commonwealth Health Insurance Connector Authority will write additional regulations and clarify other sections of the law. The connector authority is the central agency overseeing reform, and will create low-cost and subsidized insurance plans for those lacking coverage.
If a large number of companies have to pay the $295 assessment, it could make it more difficult to implement the sweeping reform package, said Richard C. Lord , president and chief executive of Associated Industries of Massachusetts, the state's largest business lobbying group.
``Since the law passed, employers have been asking us what, in our view, is a fair and reasonable contribution," said Lord. ``We've said that if you're offering a group plan to your full-time workers and you're making a contribution to the premium, you fulfill the requirement of the law. If the regulations don't recognize the contributions employers are now making, it could create some ill will."
Others suggest setting a much higher standard.
``An adequate employer contribution, in our view, would be at least 50 percent of the premium," wrote Phil Edmundson , who runs an insurance brokerage and is chairman of Affordable Care Today, an advocacy group. Among Massachusetts employers, he said, most companies pay more than half of the premiums for individual and family plans.
State Representative Patricia A. Walrath , Democrat of Stow and a member of the Joint Committee on Healthcare Financing, said an employer who paid only $100 a year towards workers' health premiums should have to pay the assessment. ``That's not fair and reasonable," she said.
The state says the $295 assessment will raise about $48 million for its free-care pool from companies whose uninsured workers are among the primary users of free care.
``The idea of the $295 assessment is to ensure access to free healthcare," said Senator Richard Moore , Democrat of Uxbridge and chairman of the Health Care Financing Committee. ``It was not expected necessarily to be something that would incentivize anybody to offer insurance to their employees."
In addition to clarifying which companies must pay the assessment, the health care financing division will set rules for two other components of healthcare reform. Employers with more than 10 workers will be expected to set up plans that enable workers to pay for healthcare premiums with pretax dollars.
Companies that don't offer the plans, and whose employees use more than $50,000 in free care , will be responsible for between 10 percent and 100 percent of that free care. The division will set the precise percentage.
Regulators will also set rules requiring employers to collect information about individual employees' healthcare coverage, so they can enforce the reform law.
Jeffrey Krasner can be reached at krasner@globe.com. 
