Massachusetts Fair Share Law and HIRD Form Requirements Repealed

more+
less-

Effective July 1, 2013, the Massachusetts “Fair Share” Law1 has been repealed as part of the Commonwealth’s 2014 fiscal year budget package.2 The Fair Share Law, in effect since 2006, required that employers doing business in Massachusetts either provide health coverage to full time employees that satisfies certain rules, or pay a contribution to the Commonwealth equaling $295 per employee per year. For more details about the Fair Share Contribution rules, please see our alerts which may be accessed here.

Also effective July 1, 2013, employers are no longer required to collect “Health Insurance Responsibility” or “HIRD”3 forms from employees who decline to participate in employer-sponsored health care coverage.

While the repeal was initially meant to relieve employers of the double burden that would be imposed by the co-existence of both the Fair Share Law and the Affordable Care Act’s “Employer Shared Responsibility” requirements, Governor Patrick surprised many stakeholders by supporting the July 1, 2013 repeal even though many of the Affordable Care Act requirements were postponed from January 1, 2014 until January 1, 2015. For more information on the Affordable Care Act delay, please see our alert accessible here.

While this is welcome news for employers doing business in Massachusetts, there remains cause for vigilance:

  • The Department of Unemployment Assistance intends to continue its enforcement efforts of Fair Share filing periods ending on or before June 30, 2013. Therefore, employers who are currently subject to enforcement efforts will need to continue to defend their compliance efforts. Further, all employers remain exposed to new audits, particularly with respect to 2011, 2012, and the first half of 2013. Employers in industries typically subject to audits, such as the restaurant and staffing industries, are advised to remain attentive.
  • The budget creates a new Employer Medical Assistance Contribution, which requires each employer with more than 5 employees to contribute an amount equal to wages times .36 of 1%. Employers newly subject to the rule shall be required to pay .12 of 1% of wages during the first year subject to the rule and .24 of 1% of wages during the second year subject to the rule.
  • Ominously, Governor Patrick has said that, if businesses start dropping coverage between now and the advent of the Affordable Care Act mandate, he is “confident that the Legislature would act to re-implement the state [fair share] program.”4

Although the Fair Share repeal and the Affordable Care Act delay allow employers some breathing room, there is still much to be done between now and January 1, 2015. Employers must not underestimate the complexity of the Affordable Care Act’s employer mandate, and should be taking steps now to prepare for 2015. Some recommended action items include:

  • FLSA/Exchange notice distributions
  • Reviewing the workforce to determine “full time” eligibility under the Affordable Care Act
  • Reviewing benefits offerings to ensure “affordability” and “minimum value”
  • Plan document updates
  • Update COBRA notices
  • Creating administrative systems to track employee hours and document offers of coverage

Endnotes

1M.G.L. c. 149, § 188

2H. 3538

3As required by M.G.L. c. 176Q, § 17

4July 11, 2013 State House News Service report