The individual coverage mandate under the Massachusetts health care reform act—Chapter 58 of the Acts of 2006 (the “Act”)1—generally obligates Massachusetts residents age 18 and older to obtain and maintain affordable health insurance coverage or be subject to a tax penalty. To satisfy this requirement, coverage must constitute “minimum creditable coverage” (MCC). The recent final MCC regulations issued by the Massachusetts Health Insurance Connector Authority (the “Connector”) established rules dictating what health insurance coverage will—and will not—satisfy the individual coverage mandate. These regulations are the topic of our October 22, 2008 advisory.

The final MCC regulations are highly prescriptive. It is therefore possible, and even likely, that a plan can be very generous but nevertheless fail to qualify as MCC. This might occur, for example, with a self-funded plan of a large multi-state employer. Recognizing that the strict application of the MCC rules could lead to a less than desirable result, the MCC final regulations include an important exception under which plans are permitted to establish compliance based on actuarial equivalency with the Connector’s Bronze-level insurance plan. In the recently issued Administrative Bulletin 01-08, the Connector set out procedures for demonstrating actuarial equivalency, and also provided clarification on mental health and substance abuse benefits and Health Savings Accounts (HSAs) coupled with High Deductible Health Plans (HDHPs). This advisory explains the key features of Administrative Bulletin 01- 08. Please see An Employer’s Guide to the 2006 Massachusetts Health Care Reform Act for a comprehensive explanation of the impact of the Act on employers with employees at Massachusetts locations.

Please see full advisory for more information.