This article pertains to MASSACHUSETTS employers. Please contact this office or your local government office for information regarding employer health insurance obligations in other states.
Below is information concerning Massachusetts employers obligation to offer and provide health insurance to employees:
The following is a helpful excerpt from a Mass. Department of Revenue web page, on March 29, 2011:
Businesses with 11 or more full-time-equivalent employees must offer Section 125 plans to enable their employees, including employees who may not be eligible for the employers' group health plan, to purchase health coverage on a pre-tax basis. Those who do not may be required to pay a surcharge if their employees (or dependents of their employees) make significant use of the state’s Health Safety Net, formerly the Uncompensated Care Pool. This is called the Free Rider Surcharge.
2. What happens if an employer offers medical coverage and an employee refuses it and can afford it?
In short, employers subject to the mandate must make a fair and reasonable contribution to their employees' health insurance. (Please visit the Division of Unemployment Assistance for information about the Fair Share Contribution (FSC).) If the employer offers and the employee refuses, the employer has the employee sign a HIRD form that shows what the minimum monthly premium on the least expensive plan would have cost that the employee turned down. If the employee is not covered under a spouse's plan, and can afford to purchase insurance and doesn't, the employee will be subject to a penalty for each month he or she lacks health insurance.
3. What if a person is self-employed and has no insurance? How is that handled on the tax return and what are the consequences?
If a person is self-employed and can afford to purchase a health insurance but doesn't, he or she will be subject to a penalty for each month without insurance. However, the individual could appeal the imposition of the penalty to the Health Connector if a hardship prevented him or her from purchasing insurance.
4. What are the employer obligations under the new health care mandate?
Information on employer reporting responsibilities may be obtained from the Commonwealth Health Insurance Connector Authority.
For purposes of the new law, the only employer reporting requirement to the Department of Revenue relates to the Form MA 1099-HC. In Massachusetts, most insurance carriers will issue this form on behalf of employers; however, you should verify this with your particular carrier. Carriers will then send a report to DOR listing all Form MA 1099-HCs they issued. If an employer is issuing the Form MA 1099-HC to employees, a report will need to be filed with DOR. For information on this requirement, please see the Instructions for Electronic Filing Form 1099-HC."
Source: www.mass.gov at http://www.mass.gov/?pageID=dorterminal&L=3&L0=Home&L1=Businesses&L2=Current+Tax+Year+Information&sid=Ador&b=terminalcontent&f=dor_healthcare_employer_FAQs&csid=Ador
The above information was posted at the Mass DOR on March 29, 2011 and is subject to change. Click here for updated information and additional general questions at the Mass. DOR website.