E-Alerts
Massachusetts Health Care Reform Law Compliance Tips
As you turn to your 2010 compliance obligations under the Massachusetts Health Care Reform Law, begin by ensuring that your organization is:
1. Collecting 2010 HIRD Forms from the right employees at the right time;
2. Verifying 1099-HC Form compliance; and
3. Completing 2009 4th Quarter Fair Share Contribution on-line filings by February 15.
New 2010 HIRD Form
The Massachusetts Division of Health Care Policy and Finance (“DHCPF”) has issued the attached 2010 Employee Health Insurance Responsibility Disclosure Form and Instructions (“HIRD Form”), which Massachusetts employers should begin using immediately. The 2010 HIRD Form is substantially similar to the 2009 version.
Massachusetts employers with 11 or more full-time equivalent employees (“reporting employers”) must obtain a completed HIRD Form from each employee who either:
- Declines to enroll in the employer-sponsored health insurance plan; and/or
- Declines to participate in the employer’s Section 125 plan.
Reporting employers must obtain a signed HIRD Form from each such employee upon the earliest of (as applicable):
- 30 days after the close of each open enrollment period for the reporting employer’s health insurance plan;
- 30 days after the close of each open enrollment period for the reporting employer’s Section 125 plan; or
- September 30th of the reporting year.
Reporting employers must also collect signed HIRD forms within 30 days of either of the following: (1) the date a new hire waives employer-sponsored health plan participation and/or Section 125 plan participation; or (2) the date an employee terminates health plan participation and/or Section 125 plan participation.
Reporting employers must return a copy of the signed HIRD Form to the employee and retain the original signed HIRD Form for three years. If an employee does not return the signed HIRD Form upon request, then the reporting employer must document its efforts to obtain the signed HIRD Form.
Please note that an employer is a “reporting employer” subject to the HIRD requirement if the sum of payroll hours for all employees who have worked at least one month from October 1 through September 30, capped at 2000 hours per employee, divided by 2000, is greater than or equal to 11. Payroll hours include all hours for which an employer paid wages, including regular, vacation, sick, Family and Medical Leave Act, short-term disability, long-term disability, overtime and holiday hours.
Please be aware that HIRD Forms contain “personal information” as defined by Mass. Gen. Laws ch. 93H and 93I, the Massachusetts Data Security Law. Therefore, HIRD Forms should be maintained, and ultimately destroyed or deleted, in compliance with the Massachusetts Data Security Law.
Form 1099-HC Compliance
Massachusetts residents who are 18 years or older are required to submit 1099-HC form information with their state income tax filings or face tax penalties. The 1099-HC form verifies, among other things, subscriber name, dates of insurance coverage and, for the first time this year, whether the coverage meets Minimum Creditable Coverage requirements. Minimum Creditable Coverage is the set of benefits that a Massachusetts resident needs in order to meet the state mandate to be insured.
The 1099-HC forms must be mailed to Massachusetts residents by January 31, 2010. Individuals should receive these forms either directly from their Massachusetts insurance provider, or from their employer, if the individual is enrolled in an out-of-state plan or a self-insured plan.
Fair Share Contribution On-Line Filing
Massachusetts employers with 5,500 or more payroll hours from October 1, 2009 through December 31, 2009, are obligated to complete an on-line Fair Share Contribution (“FSC”) filing with the Division of Unemployment Assistance (“DUA” ) by February 15, 2010, regardless of whether such employers receive a filing notification from the DUA. The FSC filing assists the DUA in determining whether employers have made a “fair and reasonable” contribution to the health insurance costs for their employees at levels specified by the relevant regulations. Employers that do not meet the “fair and reasonable” contribution may be subject to a fair share contribution of up to $295 per employee per year.
Please note that employers that received a waiver from the DUA for the 2009 quarterly on-line FSC filings, and therefore who have not completed an on-line FSC filing since this time last year, must also complete an on-line filing before February 15. Employers that were given waivers in 2009 will be asked to verify compliance with the FSC regulations for the time period from January 1, 2009 through September 30, 2009.
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We are available to assist you in complying with the above requirements, and to address any questions that you may have regarding the Massachusetts Health Care Reform Law.
