Three changes to Massachusetts Fair Share Contribution (FSC) law employers need to know effective 10/1/09

Effective October 1, 2009, the Massachusetts Division of Health Care Finance and Policy (DHCFP) has approved and adopted an amendment to the state’s Fair Share Contribution (FSC) regulations (114.5 CMR 16.00).

Among the amendments are several technical changes that clarify compliance requirements for businesses subject to the law (Massachusetts employers with 11 or more full-time equivalent employees). Although most of the amendments made are relatively minor, there are three notable revisions that employers should be aware of.

1. Removal of the majority of time rule: The FSC regulations originally stated that, for the purpose of calculating the percentage of full-time employees enrolled in their health plan, employers would count an employee who worked both full-time and part-time hours during a given quarter as either full-time or part-time based on whether they were full-time or part-time for the majority of the quarter. The new FSC rules delete this confusing provision and now simply require employers to report both the number of full-time employees enrolled in their health plan and on their payroll as of the last day of the quarter under review.
2. Group Health Plan Documentation Requirement: Under the FSC regulations, employers who offer and contribute to their employees’ group health plan must maintain documentation on it. This documentation must include a written plan description for each plan offered as well as copies of all written communication to employees about plan offerings. This documentation must contain information on benefits eligibility (including the minimum number of hours employees must work in order to be eligible for benefits) and information on premium contributions. Also, the written plan description must give evidence that the group health plan was in place during the quarter under review.
3. Premium Reimbursement Arrangements are now recognized as group health plans: However, this is only true provided that employers have written documentation designating specific insurance plans for use by employers.

As mentioned earlier, these new FSC regulations are now in effect and employers will need to immediately take all necessary steps to ensure compliance with them.

Employers can find the full text of the newly revised FSC law on the Division of Health Care Finance and Policy (DHCFP) page of www.mass.gov.