Lawmakers push repeal of health care fees

Jan. 20--BOSTON -- Republican lawmakers are pushing for a repeal of fees charged to companies that aren't providing health insurance to a majority of their workers.

Business leaders say the assessments unfairly punish companies for the decisions of workers who sign up for insurance through MassHealth, the state's Medicaid program.

Senate Minority Leader Bruce Tarr has filed a bill that would scrap the fees retroactively from Jan. 1 and require the state to reimburse companies for money collected this year.

"It's having a negative impact not just on employers but the overall business climate, particularly when it comes to creating new employment," the Gloucester Republican said.

A similar bill has been filed in the House of Representatives by the GOP minority caucus, according to state Rep. Brad Hill, R-Ipswich, a co-sponsor of the measure.

"We need to give the business community some relief from these assessments," Hill said. "Small business owners are bearing the brunt of it."

As of Dec. 13, the state had collected nearly $300 million from the temporary health care fees, according to the Executive Office of Administration and Finance.

Last year, Gov. Charlie Baker rolled out a policy aimed at reducing health care costs by increasing an annual fee, called the Employer Medical Assistance Contribution, from $51 to $77 per employee for those companies where fewer than half of the workers are enrolled in health insurance plans.

In addition, employers are fined up to $750 per employee for those who choose MassHealth or subsidized coverage through the Massachusetts Health Connector.

Under the Affordable Care Act, the state cannot block private sector employees from choosing Medicaid, even if they are are also offered employer-sponsored health coverage.

The health care fee has been a major source of friction between the Baker administration and the state's business community.

Last year, Baker pitched a $2,000 per person fee on businesses with 11 or more employees that don't provide insurance to at least 80 percent of their workforce.

The fee was modeled on the "fair-share contribution" that was once part of the state's health care system, signed into law by Republican Gov. Mitt Romney in 2006.

Lawmakers rejected Baker's MassHealth reforms but approved a health care fee and coupled it with reduced unemployment insurance rates to offset the impact on businesses. The quarterly assessments began last April.

Baker is trying to bring down costs at MassHealth, which covers more than 1.9 million people and consumes 40 percent of the state's $41 billion budget.

Republican lawmakers, who've supported many of those reforms, say inaction by Democrats is driving up costs.

"The small business community was told that those reforms were going to go though, but they didn't," Hill said. "We don't believe that is fair."

Business leaders argue that the state has collected enough money for the assessment and cite a slight decline in MassHealth enrollment over the past year.

They say state tax collections have exceeded targets over the past several months, putting the state on much firmer financial footing.

"The conditions that led to the imposition of the surcharge no longer exist," said John Regan, executive vice president of government affairs at Associated Industries of Massachusetts, a lobbying group. "Employers who have paid hundreds of millions of dollars in assessments believe it is fair to look at ending the surcharge in year two."

The business group said surveys of members found rising health care costs and the impact of the health care fees among their main concerns.

Meanwhile, the state has only approved about 100 hardship waivers from businesses out of 246 requests, according to the group.

"Some workers are making the smart economic decision to take the lower-cost health care option for themselves and their family," said Christopher Carlozzi, Massachusetts state director of the National Federation of Independent Businesses, one of several groups seeking a repeal of the policy. "It's unfair that employers are being penalized."

He said the unpredictability of the health care assessments "makes it particularly volatile for business owners."

"When you're hiring someone you have no idea if they're receiving state-subsidized coverage," Carlozzi said. "So a lot of business owners are getting caught off guard when the end of the fiscal quarter comes and all of a sudden they receive an assessment from the state."

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group's newspapers and websites. Email him at cwade@cnhi.com.

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