Connector Getting Tough With Employers

December 12, 2007

The Connector Authority is warning businesses that their employees could face penalties if employer-sponsored plans don´t meet new state requirements. Health plans available to employees must meet new Minimum Credible Coverage standards, including prescription drug coverage, by Jan. 1, 2009, and employers who are not in compliance now should begin examining their options in early 2008, according to the new state authority. The Connector is mailing information to more than 190,000 businesses this month to help them understand the state´s new minimum creditable coverage standards. The Connector on Monday released a list of 13 areas of coverage that employees must address in their insurance plans, including mental health services, prescription drug coverage, ambulatory patient services, caps on deductibles and out of pocket spending, and bans on per diem limits on inpatient care and annual or per-sickness benefit limits. About 160,000 insured Massachusetts residents are enrolled in plans that don't include prescription drug coverage, and Connector Authority Executive Director Jon Kingsdale warns that, beginning Jan. 1, 2009, individuals in plans that don´t meet minimum standards face a tax penalty for every month that they have "inadequate coverage." Uninsured individuals who fail to attain coverage by Dec. 31, 2007, and are not exempt from the state´s new mandate, face a $219 tax penalty in the new year. That penalty rises significantly next year, for both the uninsured and insured individuals in non-compliant plans, to half the cost of the state's most affordable health plan.

Partially as a result of HCR, premiums for small businesses increased between 10% and 30%. Minimum credible coverage requirements, while providing more robust coverage, necessarily mean higher deductibles, copayments and the likelihood of continued double digit premium increases.

The bottom line: skyrocketing costs are threatening HCR. Look for additional updates on the sustainability of Health Care Reform.

Please feel free to e-mail any questions, comments or concerns. We will continue to update you as more information becomes available.

Back to Headlines

Healthcare Financial, Inc. is a one of the top resources for information on healthcare changes in Massachusetts.

Stay informed - Please sign up to receive our Industry Update emails.