We want to help you understand this important new law.  Below is a brief overview of some of its key provisions.  To find out more, click here.  This will bring you to the Commonwealth Health Insurance Connector.

Individual Responsibility

As of July 1, 2007, the law will require all residents of Massachusetts aged 18 and over to have health insurance coverage.  The amount of coverage required is called "creditable coverage." Anyone without creditable coverage may lose their personal tax exemption. Beginning January 1, 2008, anyone without creditable coverage may have to pay a penalty based on one-half of the premium cost.

Insurance Market Changes

The law also is designed to help individuals get affordable coverage.  For example, the law:

• Authorizes the creation of new health insurance products, such as products for individuals between the ages of 19 and 26.
• Expands coverage for dependents under family policies. Dependents may be covered under a family policy for two years after losing dependent status under the IRS code, or to age 26, whichever comes first.
• Combines the small group (like, small businesses)  and nongroup (individual) markets to make coverage for individuals less expensive.
• Expands Medicaid eligibility and coverage requirements.

Commonwealth Care Health Insurance Program (“Commonwealth Care”)

The law set up the new Commonwealth Care state premium assistance program.  Anyone with a household income of 300% of the federal poverty level or lower, and who meets other requirements set by the state, is eligible for this program.

Commonwealth Health Insurance Connector Authority (the “Connector”)

The law creates an independent public authority called the Connector.  The Connector:

• Administers the Commonwealth Care Health Insurance Program,
• Sets quality and other standards  for health insurance plans, and
• Facilitates the purchase of health insurance plans that meet these standards.

Those who can buy plans through the Connector are:

• Non-working individuals,
• Employees of large employers who do not have access to employer-sponsored insurance, and
• Employees of small employers (those with 50 covered lives or less).

Through the Connector, non-traditional workers - part-time and seasonal workers, contractors, sole-proprietors, and those with multiple jobs - will be able to purchase portable health insurance coverage that goes with them from job to job. Through the Connector, small businesses will be able to offer a choice of affordable products to their employees, and the employees will be able to purchase health insurance on a pre-tax basis.

Information for Employers

Under the law, employers also are responsible to make sure that their employees have access to affordable health insurance coverage.  The following provisions affect employers:

• Section 125 plans
  Employers with more than 10 full-time employees must create “cafeteria plans”, as authorized by Section 125 of the Internal Revenue Code.  Under such plans employees can purchase health insurance on a pre-tax basis.
• Free-Rider Surcharge
  The law requires companies with more than 10 employees to offer to contribute toward, or arrange for the purchase of health insurance.  If they do not and their employees use more than $50,000 in free care services in one year, the company may be liable for 10% to 100% of the state funded hospital costs of the free care services used by their employees and dependents.
• Employer Assessment
  The law requires companies with more than 10 employees to offer a group health plan and to make a “fair and reasonable premium contribution.”  If they do not, the company will be required to pay an annual assessment of up to $295 per employee. 

Transparency in Quality and Cost

The law creates a Health Care Quality and Cost Council.  The Council will set quality improvement and cost containment goals for Massachusetts. The Council will collect cost, price and quality data from health care providers, pharmacies, payers and insurers. The Council will develop and maintain a web site with cost and quality information about providers for consumers and purchasers.