Massachusetts Health Insurance Plan Deadline

Massachusetts universal health plan is approaching a critical deadline on January 1, 2008. On that date, those individuals and businesses that have not complied with the law's mandate to purchase insurance, will be assessed fines that will take effect when the business or individual files Commonwealth taxes.

With former governor Mitt Romney in the race for the presidency and states such as California and Rhode Island considering the implementation of such mandatory universal care in their states, the Massachusetts plan is under enormous scrutiny.

For the individual, Part I, Title XVI, Chapter 111M, Section 2(b), of the Massachusetts General Laws requires all Massachusetts residents to have "creditable coverage." The penalty is the loss of the personal income tax exemption ($219) for the 2007 filing year (filed in April, 2008). That penalty increases to 50% of the premium for available coverage in the 2008 filing year (filed in April, 2009). If the individual cannot find affordable coverage (as defined by the government) or is opposed on religious grounds, there are some exceptions to the penalty.

Businesses also face a penalty and it is instructive to business owners nationwide to look at the mandate imposed upon Massachusetts' businesses because any national universal health plan will have some mandate for businesses to carry coverage. The only question is how much it will cost business or benefit business. The Massachusetts plan:

• Applies to businesses with 11 or more employees.
• Requires employers to offer the same health plan to all employees regardless of level within the company.
• Requires the employer to either have 25% of all employees enrolled in a creditable coverage plan or to pay 33% of the premium for those enrolled.
• Assesses a "Fair Share Assessment" of $295 per employee for businesses that do not comply.
• Charges a heightened surcharge on employers with employees or dependents receiving state-funded assistance providing health care.

If you are a resident of Massachusetts or do business in Massachusetts, see your insurance professional and make sure you are in compliance to avoid the penalties.