Question:
Are there any new requirements for employer-sponsored insurance?

Answer:
In order to contract for a fully-insured plan:

  • Employers that buy health insurance must allow every eligible full-time employee to join any health plan that the company offers; and,
  • Employers may not pay a higher percentage contribution for higher wage employees than it does for lower wage employees (with an exception for employees covered by collective bargaining agreements.)

Question:
Can the employer contribute different amounts for part-time employees?

Answer:
The employer may offer different plans and have a different contribution level for full time workers compared to part time workers.

Question:
Does nondiscrimination apply to all employer groups or only those of a certain size?

Answer:
The nondiscrimination rule applies to any employer group entering into a contract with a health carrier on or after July 1, 2007, regardless of the size of the group. The other requirements for the employer such as the Fair Share, Section 125 and HIRD requirements only apply for groups of 11 or more.

Question:
Does a self-funded plan need to comply with the nondiscrimination requirements?

Answer:
No. The nondiscrimination requirement is a requirement for insurance carriers offering fully-insured products in Massachusetts. Federal ERISA requirements exempt self-funded plans from state insurance requirements.

Question:
Can an insurance company contract with an employer that makes a lower contribution to the health insurance plan for more highly compensated employees than it does for other employees.

Answer:
Yes. The statute requires that the insurance carrier cannot contract with an employer that makes a greater contribution to the health insurance plan for more highly compensated employees than it does for other employees.

Question:
If an employer gives a severance package to an employee who is leaving and health care is included in the severance package, is this acceptable? For example, the employer wants to pay 100% of the premium for the next six months as part of the package.

Answer:
Yes. Upon leaving the group the individual is no longer a full-time employee and the non-discrimination requirement only applies to full-time employees.

Question:
If a company is not self-funded but purchases a health insurance product from an out-of-state carrier for its employees and some of the employees are Massachusetts employees, would that insurance product need to comply with the nondiscrimination requirements for the Massachusetts residents?

Answer:
No. The nondiscrimination requirement applies to products offered to Massachusetts employers and their employees who are Massachusetts residents. It would not apply to products offered in another state.

If an employer located in another state has Massachusetts employees and the employer buys coverage from an insurer in that other state to cover the Massachusetts employees, then the Massachusetts non-discrimination law does not apply.

If, however, the employer located in another state does buy coverage from a Massachusetts insurer through the employer's Massachusetts subsidiary, then the Massachusetts subsidiary is the buyer and the insurance coverage that is being bought is subject to the Massachusetts non-discrimination laws.

It should also be noted that even if the employer in the other state is not subject to the non-discrimination law, an employee who is a Massachusetts resident is still subject to the individual mandate that went into effect on July 1, 2007.

Question:
Are coop students considered full-time employees under the nondiscrimination requirements?

Answer:
If the coop student is a paid employee and is expected to work at least 35 hours a week on the average and is not temporary (i.e., will work more than 12 consecutive weeks) and is not seasonal (as recognized by the DUA), then the coop student is considered full-time.

Question:
An employer often will bring on employees with specific technical skills needed to complete a job and the employees will work on a project for 3 to 12 months. The employer has always considered these employees to be temporary. Can they still be considered temporary under the nondiscrimination requirements?

Answer:
If the employee is expected to work at least 35 hours a week on the average and will work for more than 12 consecutive weeks, the employee is considered to be full-time under the nondiscrimination requirements.

Question:
The employer has historically offered some full-time employees 100% contribution toward their health insurance as a mechanism to help recruit certain needed skilled workers. Other employees receive lesser contribution. Can the employer grandfather these employees and leave them at the 100% contribution but offer equal contribution to all new employees?

Answer:
No, all full-time employees must be offered a contribution level that meets the statute requirements.

Question:
Can the employer require a qualifying period (even up to a year) before employees are eligible for the health plan?

Answer:
There are no specific insurance requirements around qualifying periods.

Question:
Can the employer offer a higher contribution level to a full-time employee who works more hours than a full-time employee who works less hours (e.g., 100% contribution for a 40 hour per week employee and 85% contribution for a 35 hour a week employee).

Answer:
No. The contribution level cannot be more for the more highly compensated employee (i.e., working more hours).

Question:
Can the carrier rely on passive acknowledgement from the group to confirm it is compliant? If the group doesn't reply then the carrier would assume they are in compliance.

Answer:
The carrier has discretion regarding the form of assurance of compliance by the employer. The carrier needs to understand that if in the future they are subject to a market conduct review, they will need to show due diligence with respect to compliance with these provisions.

Question:
If a per diem employee works 40 weeks out 52 throughout the year can they be measured on the base period of one year? Therefore if the employee works over 1,850 hours in the year they would be considered full-time and below that line would be part-time. It does not seem practical to measure it on shorter timeframe.

Answer:
As insurance carriers are required to establish whether a group is complying with the nondiscrimination requirements at the time they enter a contract with the group, the employer will need to determine at that time whether an employee will be expected to work 35 hours a week. If the employer estimates that an employee will - on the average over an applicable base period - work at least 35 hours a week, then that employee is considered full-time. An "applicable base period" could be considered the routine pay period.

Question:
How would a company handle an employee with the following work schedule (or any annual status changes) and what, if any changes needs to be implemented in light of MA Health Care Reform Chapter 58.

Example (One Employee's work schedule):

Employee works 15 hours per week from 9/1 to 6/14.
Employee works three 35 or more hour work weeks from 9/1 to 6/14.
Employee works Full Time from 6/15 to 8/31.

Answer:
An employee that is expected to work more than 12 consecutive weeks for 35 hours a week or more would be considered a full-time employee for the duration of the employment.

Question:
Is a contribution basis that varies based on the number of hours worked considered to be discriminatory?

Answer:
The contribution level should not vary based on the number of hours worked for a full-time employee. The contribution level may be less (or none) for part-time employees than for full-time employees.

Question:
If a company has one health plan and one tax ID number, but multiple locations, can there be different contribution levels for the different the locations of the sub-groups?

Answer:
The contribution level should not vary based on the location of an employee within an entity that has one tax ID number.

Question:
Can H2B Visa holders be offered Travel Insurance in lieu of the plan for other full-time employees? Will Travel Insurance meet their individual mandate?

Answer:
If the H2B visa employee is a full-time employee, as defined, then that employee must be offered the same plans that are offered to all other full-time employees. The employer may also offer a Travel Plan in addition to other plans offered, as an alternate plan option that any full-time employee could choose.