Amount Employers Must Pay Toward Worker Health Insurance Premiums

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Massachusetts state Sen. Richard Moore (D) in a letter on Thursdayurged the commissioner of the state health care finance division toissue emergency regulations to increase the required minimumcontribution by employers to workers' health insurance coverage underthe state's health insurance law, the Boston Globe reports. The law took effect July 1 and requires all state residents to obtain health coverage.

The Division of Health Care Finance and Policylast summer reduced from 50% to 33% the minimum amount that companieswith 50 or fewer employees must contribute to the cost of workers'health coverage. Employers that do not contribute to employees' healthplans must pay an annual $295-per-employee surcharge to a state fund.

Healthcare advocates and some state lawmakers are concerned that the changecould result in employers shifting more of the cost of health care toemployees, leading to fewer workers being able to afford coverage.

According to Blue Cross and Blue Shield of Massachusettsspokesperson Chris Murphy, the insurer recently changed its minimumemployer contribution to health plans to 33% in response to "a lot ofsmall businesses" contacting the company, "trying to provide insurancefor their employees, but they can't meet the 50% contributionrequirement." Murphy added, "Now, more employers will get to offerhealth insurance to employees and be more competitive in the market,and the employee gets coverage that's less expensive than if they werebuying insurance individually." BCBS still would require companies withmore than 50 workers to contribute half of workers' health insurancecosts.

Concerns

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Moore said the move by BCBS "hasthe potential to unravel some of the progress we've been making inreducing the number of uninsured." In the letter to Sarah Iselin,commissioner of the healthcare finance division, Moore requested animmediate restoration of the 50% minimum, calling the 33% contributiona "glaring loophole" that had been "inherited" from the administrationof former Gov. Mitt Romney (R). Moore and other advocates citedresearch that shows most companies in the state contribute at least 75%toward individual premiums.

John McDonough, executive director of Health Care for All,said the BCBS change sets a "bad precedent," making it easier forcompanies to provide "degraded" health coverage. He also expressedconcern that other insurers would adopt similar policies.

Iselinin a statement said the state is "carefully monitoring" implementationof the insurance law and "will make adjustments where they are needed."Sharon Torgerson, a spokesperson for Harvard Pilgrim Health Care,said the insurer requires a 50% contribution from all employers, but"Blue Cross' decision has forced us to reconsider our existing policy"(Krasner, Boston Globe, 7/6).

Editorial

The "goal" of the Massachusetts health insurance law, which took effectJuly 1, "is to make health insurance more affordable by spreading thecost to the healthy as well as the sick," a Washington Posteditorial states. The law requires all state residents to obtain healthinsurance. However, "early signs are not encouraging: Already, thestate plans to exempt 60,000 residents because they cannot afford anyof the offered health plans," the editorial states. The editorial adds,"With skyrocketing health care costs devouring the federal budget andundermining the competitiveness of many U.S. industries, the success orfailure of the Massachusetts law could have far-reaching implications,especially for business" (Washington Post, 7/8).

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Reprinted with permission fromkaisernetwork.org.You can view the entire KaiserDaily Health Policy Report, search the archives, andsign up for email delivery at kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published forkaisernetwork.org,a free service of The Henry J. Kaiser Family Foundation.

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