E-Alerts

Massachusetts Legislature Repeals Employer Health Care Mandate

July 2013 by Sara Goldsmith Schwartz

Under the fiscal year 2014 budget recently signed by Governor Deval Patrick, the employer “Fair Share Contribution” provision of the Massachusetts health care reform law has been repealed, effective immediately. As a result, state law no longer requires Massachusetts employers to provide health insurance to their employees or pay a penalty.

The repeal was proposed by Governor Patrick in January 2013 as a result of the enactment of the federal Affordable Care Act (“ACA”) (i.e., Obamacare), in order to avoid duplicative requirements and penalties under state and federal law. Because, however, the Obama Administration recently postponed the effective date of the ACA employer mandate until January 1, 2015, Massachusetts employers are now – albeit temporarily – not required to provide health insurance under either law.

Governor Patrick explained that he signed the repeal, despite the federal delay, because Massachusetts employers are likely to maintain their health insurance offerings until the federal mandate kicks in.

The repeal does not affect the individual mandate or market reform components of the Massachusetts health care reform law, including the non-discrimination requirement. In addition, Massachusetts employers are still required to file their reports of Fair Share Contributions through June 30, 2013.

Recommendations For Employers

In light of the repeal of the Fair Share Contribution requirement, employers are advised to:

File their reports of Fair Share Contributions through June 30, 2013;

Assess whether to revise or leave in place their current health insurance offerings before the ACA employer mandate becomes effective as of January 1, 2015; and

Monitor future developments in this area, including further details as to the eventual implementation of the ACA employer mandate.

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Please contact us if you have any questions regarding the repeal of the Fair Share Contribution requirement or any other benefits issues. We regularly assist employers with such issues and would be happy to assist you.