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Employer Fair Share Contribution Repealed
July 30, 2013
On July 12, 2013, Governor Patrick signed the Commonwealth’s FY 2014 budget bill, which included a provision repealing the Massachusetts employer Fair Share Contribution statute. The repeal was effective as of July 1, 2013. The last quarter for Fair Share Contribution filings ended June 30, 2013. The last quarterly Fair Share Contribution filing with the Division of Unemployment Assistance will be due August 15, 2013.
Since 2006, Massachusetts has required all Massachusetts employers with 11 or more full-time equivalent employees to offer health insurance to those full-time employees or pay a penalty of up to $295 per year per employee. But with the federal Affordable Care Act (ACA) employer mandate scheduled to go into effect January 1, 2014, state officials added language to the budget bill that would scrap the Fair Share Contribution and avoid subjecting Massachusetts employers to overlapping state and federal health insurance mandates.
Even though the ACA employer mandate has been delayed until at least January 1, 2015, Governor Patrick decided not to veto the Fair Share Contribution repeal.
The impact on Massachusetts employers of abolishing the Fair Share Contribution is:
- Employers with between 11 and 50 full-time employees no longer will be required to make quarterly Fair Share Contribution filings with the Division of Unemployment Assistance, offer health insurance to their employers, or pay the Fair Share Contribution to the Commonwealth (if they would have been required to do so). This group of employers will be exempt from the ACA employer mandate.
- Employers with more than 50 full-time employees no longer will be required to make quarterly Fair Share Contribution filings with the Division of Unemployment Assistance or pay a Fair Share Contribution to the Commonwealth (if they would have been required to do so). For a period of at least eighteen months, they will be freed of any legal obligation to offer health insurance to their full-time employees. However, this group of employers will be subject to the ACA employer mandate as of January 1, 2015, and the obligation to offer health insurance to their full-time employees, or pay a government imposed penalty, will resume on that date.
- All employers with 11 or more full-time equivalent employees will continue to be required under state law to maintain Section 125 cafeteria plans.
- All employers with 11 or more full-time equivalent employees will continue to be required under state law to file Health Insurance Responsibility Disclosure (HIRD) forms with the Commonwealth Connector.
If you have any questions about this topic, please contact Ruselle W. Robinson in our Health Care Group.
Client Advisory is provided for information purposes only, and does not constitute legal advice. According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2013 Posternak Blankstein & Lund LLP. All rights reserved.