July 19, 2006 GAC Update
There was no Update sent last week. The full City Council will not meet again until August 7 but some Committees will meet during July.
This week’s update features a report on Representative Marty Walz gave presentation on the State’s new Health Care law at the June GAC meeting and luncheon.
Upcoming GAC Events
The 2006 Government Affairs program is sponsored by Novartis Institutes for BioMedical Research.
No GAC meetings until September. My plan for the first meeting of the fall, which is scheduled for Tuesday, September 26, is a discussion among those of you active in the GAC about the direction of this committee for the next couple of years. I will work on a draft agenda in the next several weeks. Please send your thoughts on this matter to me at tsmith@cambridgechamber.org
Representative Marty Walz Talks to the GAC about New Health Care Law
The Government Affairs Committee met on Tuesday, June 26 and heard a presentation from State Representative Marty Walz on the health care reform law passed by the legislature and signed by the Governor this past spring. Representative Walz, who also practices employment law with the firm Littler Mendelson, provided her perspective as both a member of the legislature and an employment attorney. Representative Walz has written a newsletter on the law titled New Massachusetts Health Care Legislation Imposes Obligations on All Employers in the State. Copies of the newsletter are available from the Chamber and Representative Walz and on her website at www.martywalz.com.
With respect to expanding access to health care, the law has three key pieces: an individual mandate; various employer responsibilities for health insurance; and expanded insurance by the Commonwealth for lower income people. Her discussion focused on the individual mandate and employer responsibilities.
Under the law all individuals 18 and over must have health insurance by July 1, 2007 if affordable health insurance is available. Children can be covered under a parents’ plan up to age of 25 or for two years past the loss of dependent status, whichever occurs first, and insurers may offer "stripped down" products for 19-26 year olds. The individual mandate creates a market for products geared to individuals in both cost and coverage. According to Representative Walz, the law hinges on health insurers providing affordable products.
Employers of 11 or more full-time equivalent employees are required establish section 125 plans (also called cafeteria plans) that provide employees the ability to purchase health insurance using pre-tax dollars. Employers are also responsible for making a "fair and reasonable" contribution toward employee health insurance. The state is currently developing regulations to define a “fair and reasonable” contribution. Employers who do not make a fair and reasonable contribution toward the cost of their employees’ health insurance will be required to make a "fair share contribution" of $295 per full-time employee per year and may be subject to a "free rider surcharge" if their uninsured employees or dependents receive free care.
To facilitate providing insurance to individuals and small businesses, the State has created a new agency called the Commonwealth Health Insurance Connector. The Connector will certify health insurance plans as being of good value and high quality. The Connector will serve as an information source and will collect premium payments. The Connector was established to merge the individual and small group markets into one larger market for health insurance products.
During the talk, participants asked a number of questions regarding the law. Representative Walz was asked about who is writing the regulations and when regulations are to be completed. She said that multiple agencies have regulatory responsibilities and that the law defines when regulations are to be in place. For example, the definition of "fair and reasonable" contribution is required by October 1, 2006 which is in-line with the date insurers are required to have affordable plans available for individuals. She was asked how the number of employees is determined, and she said that a formula in the law measures the number of full-time equivalent employees over a period of time.
Representative Walz stressed that there are many unknowns in this law that will be addressed in the regulatory process, and she also mentioned that the law will require some changes to address technical issues missed during the drafting of the legislation. The ability of health insurance providers to make affordable plans available is also a major unknown.
