- Employers and the health law
- http://www.boston.com/yourlife/health/other/articles/2007/02/21/employers_and_the_health_law?mode=PF
February 21, 2007 (The Boston Globe)
THE MASSACHUSETTS health reform law imposes reasonable burdens on employers as part of a shared societal imperative to provide health insurance for almost everyone in the state. The Associated Industries of Massachusetts, a 7,600-member employers' organization, is helping to explain the complex law, and the message was clear at a meeting in Andover last week: Every business needs to establish a plan to pay for the premiums.
Many of the 90 or so businesspeople in the room knew all about the so-called Section 125 plans, named after a section of the federal tax code that allows people to pay for health insurance out of pre tax dollars. The employees' taxable income is reduced by the amount he or she pays for premiums. And the employer gets a bonus as well: It isn't necessary to pay the 7.5 percent Social Security tax on that money.
Much of the discussion Friday was taken up with the impact of the law on employers of 11 or more people. If they don't establish a Section 125 plan by July 1, they could face significant penalties.
Smaller businesses might think of setting up Section 125 plans as well. It could give them a small tax break (from the forgone Social Security tax payments) and it also would allow their employees to fulfill their own obligation under the law. As of July 1, everyone in the state 18 and over is required to have health insurance.
The law is based on a set of shared responsibilities among the employer, the individual, and the state. The Legislature created the Commonwealth Health Insurance Connector Authority as part of the law to facilitate the creation of affordable policies for low-income people, owners of small businesses, and individuals.
Jon Kingsdale, the connector CEO, was on hand Friday to answer questions. As for Section 125 plans, he said, "Practically speaking you should just do it." He figured that employees would save on average 40 percent off the premiums because of the pre tax benefits.
Many of the businesspeople in the room were worried about the definition of full- and part-time employees. Under the law, some part-timers might actually be considered full-time. In response to his own uncertainties, one frustrated participant said the answer was to "move to New Hampshire," where there is no comparable law.
Illness, however, is a reality of life, and Massachusetts is right to insist that health insurance be spread across the population to relieve its burden. The Andover meeting was the second of nine planned by Associated Industries and the connector to explain the new requirements. Everyone who helps implement the law -- be they employees, employers, government officials, or industry representatives -- is making Massachusetts a better place to live.
© Copyright 2007 The New York Times Company