The budget just sent to Governor Patrick includes provisions repealing the Massachusetts Employer Fair Share statute. This is the requirement that employers with 11 or more workers must provide “fair and reasonable” health insurance coverage to their workers. If not, the firm pays a $295 fair share payment. We were not supportive of the repeal, but understood the logic: since the federal ACA employer requirements were taking effect in January, it was OK to lose the state structure for just 6 months.
Then yesterday, the Obama administration announced that it would not enforce the federal employer fair share provisions for 2014.
This changes everything. Because these provisions are sections of a budget bill, the Governor has the opportunity to treat each section individually – sign, veto, or return with an amendment. If the Governor signs those provisions into law, the state will have no effective employer responsibility requirement for at least 18 months.
We call on the Governor to either veto the repeal section, or return the provision with an amendment preserving the principle of fairness and responsibility for employer-provided health insurance. The Massachusetts fair share program should remain in force until the federal program kicks in.
Shared responsibility was the bedrock principle of chapter 58, and key to its success. It should not be thrown away. Here are some of our reasons:
- Effectiveness – If it’s not broke, don’t fix it.
The current system has worked well, increasing employer offer rates. So while we can’t know for sure to what extent the fair share system contributed to this, it has worked well. We should maintain our existing system .
- Conceptual – Meaningful Shared Responsibility
The fair share provisions grew out of a shared value that all sectors should make a contribution to improving our health care coverage. Employers should have their obligations, as well as individuals and government and providers and insurers, all who play a role. Shared responsibility built the broad political support for the law.
- Fairness – Employers who don’t cover their workers have an unfair advantage, and should contribute to the cost of health care
An employer that doesn’t cover their workers has an unfair cost advantage against a competitor who does. Unchecked, this could lead to a race to the bottom. Thus its fair to ask non-offering employers to pay something. In the Massachusetts context, employers who cover their workers also pay extra in their premiums to fund the Health Safety Net (HSN) program. In effect, they are subsidizing their less responsible competitors. The Fair Share assessment was set at $295 per worker to approximate the offering employer’s contribution to the cost of the HSN cost per worker. Eliminating the fair share system would be unfair to the vast majority of employers to who do cover their workers.
- Political – Honor the agreement
The bill that became chapter 58 was stuck for months in conference between the House bill, which had a very extensive pay-or-play requirement, and the Senate bill, which did not. The Fair Share compromise was a business community proposal that broke the logjam, and the interested groups – business, consumers/ACT!, health care providers and insurers, and the legislature agreed to the deal. Reneging now on the deal should require the consent of all parties to the original compromise.
Keeping the Massachusetts employer responsibility law will also provided much needed support for the approach of the ACA. The attacks that have intensified after yesterday’s decision can be refuted by our ongoing successful implementation.
Employers are already calling on the Governor to ditch the fair share law, despite the changed circumstances. Associated Industries blogged on this, without providing any substantive rationale for the move.
Governor Patrick has until next Wednesday to make a decision on this. We will work aggressively with the legislature to uphold his decision, should it be favorable. Massachusetts should hold strong in its commitment to shared responsibility.
Health Care For All (cross-posted from our A Healthy Blog