Massachusetts made history in April of 2006, by creating the first comprehensive health care reform law. This recent reform is intended to increase insurance coverage for the residents of the Commonwealth. Chapter 58 of the Reform Acts is designed to promote access to Affordable, Quality, and Accountable Health Care.
Chapter 58 Summary:
• Requires individuals to obtain and maintain health insurance coverage
• Requires employers with more than ten employees to contribute towards health insurance coverage and health care costs
• Authorizes the creation of new health insurance products
• Provides subsidies to low-income individuals to assist in their purchase of these products and makes changes to the current Massachusetts Medicaid program
• Reforms/merges the small group and non group insurance markets
• Creates the Commonwealth Health Insurance Connector – an independent authority to “connect” individuals and small groups with affordable health insurance products.
While Chapter 58 puts the responsibility of providing quality affordable health care products on the state’s health plans, it also places a certain amount of responsibility on the residents of the Commonwealth. The law requires Massachusetts’ residents, age 18 and older, to obtain and maintain health insurance coverage beginning July 1, 2007. Residents will confirm that they have maintained heath insurance coverage for the previous year on their state income tax returns beginning in 2008. Non-compliance with the individual mandate will result in a loss of personal tax exemption for the tax year 2007.
Beginning with the 2008 tax year, penalties will increase up to 50% of the premium individuals would have paid if they had purchased health insurance. Beginning in January of 2008, health plans will be required to submit monthly reports on the first day of each month, of the previous month’s membership, identifying those individuals for whom they provided “creditable coverage.” The Bureau will maintain a database of all health plan membership to confirm who in the Commonwealth has health insurance coverage and during what time frames.
Mandated Dependent Coverage
Young adults make up a significant part of the uninsured population in the Commonwealth. In addition to creating products specifically for the young adults who do not have access to employer-sponsored health insurance, the law also expands the dependent coverage under family policies. The law requires all family policies to include coverage for children up to the age of 25 or for two years past the child’s loss of dependent status under IRS code, whichever occurs first. We’re expecting this provision to be amended by the end of July to extend to age 26 and to be effective for fully insured groups with anniversary dates on and after January 1, 2007. This new mandate does not apply to self-insured groups.
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