Massachusetts Health Plan Coverage & Reporting Requirements

MA Health Plan Coverage - MCC Background

The Massachusetts’ health care reform law requires most residents of the state (who are over 18) who can afford health insurance to have coverage for the entire year, or pay a penalty through their tax returns. These state residents must be enrolled in health insurance plans that meet MA Minimum Creditable Coverage (MCC) requirements.

Generally, MCC-qualified health plans must cover four core areas of physician services, inpatient acute care, day surgery, and diagnostic procedures and tests. These core services must encompass coverage of a broad range of services including:

1. Ambulatory Patient Services, including outpatient, day surgery and related anesthesia;
2. Diagnostic imaging and screening procedures, including x-rays;
3. Emergency services;
4. Hospitalization (including at a minimum, inpatient acute care services);
5. Maternity and newborn care, including prenatal care, post-natal care, and delivery and inpatient services for maternity care;
6. Medical/surgical care, including preventive and primary care;
7. Mental health and substance abuse services;
8. Prescription drugs;
9. Radiation therapy and chemotherapy.

MCC Plan Cost-Sharing Limits

An MCC-compliant plan for Massachusetts residents must adhere to the following plan cost-sharing limits for 2024 as captured in the table below:

Certain qualifying high-deductible health plans (HDHPs) may satisfy MCC requirements without meeting the limits outlined above, as well as certain health arrangements provided by an established religious organization under prescribed conditions.

Supplemental health plans, including accident-only, limited scope vision or dental benefits, and hospital indemnity insurance policies, are generally not considered MCC-compliant plans.

MA Form 1099-HC

Massachusetts taxpayers must indicate if they maintained MCC health plan coverage when completing their Massachusetts personal income tax returns using MA Form 1099-HC.  Massachusetts taxpayers who do not maintain MCC for themselves and their dependents throughout the year and who do not qualify for an exception will be subject to a state tax penalty.

Group health plans covering Massachusetts residents are required to:

1. Provide those individuals with MA Form 1099-HC by January 31 of the following year indicating whether the coverage was (or was not) MCC.
2. Report this information to the MA Department of Revenue (DOR).

Employer Impact

Although employers are not obligated to provide MCC for their Massachusetts employees, many employers do use their employment-based health plans to satisfy the MCC requirements in an effort to help their Massachusetts resident employees avoid this state tax penalty.

• Fully Insured Plans: Plan sponsors of fully insured plans can generally rely on their insurance carriers to provide MA Form 1099-HC to Massachusetts residents covered under the plan and complete the required reporting to the MA DOR.
• Self-Funded Plans: Plan sponsors of self-funded plans generally have to negotiate with their third-party administrators (TPAs), as part of their administration fees, to provide MA Form 1099-HC to covered Massachusetts residents.

Multistate employers sponsoring health plan coverage with Massachusetts resident employees are advised to take the following steps with their insurance carriers/TPAs:

1. Determine if the plan(s) offered satisfies MCC requirements;
2. Confirm that the insurance carrier or TPA will send Form MA 1099-HC to Massachusetts employees by January 31^st after the end of a plan year; and
3. Confirm the insurance carrier or TPA will complete the required MCC reporting to the MA DOR. 

Reporting Rules – MA Health Insurance Responsibility Disclosure (HIRD)

As a reminder, the Health Insurance Responsibility Disclosure (HIRD) form is a state reporting requirement in Massachusetts, launched in 2018. The HIRD form collects employer-level information about employer-sponsored group health plan(s), and is administered by MassHealth and the DOR through the MassTaxConnect web portal.

HIRD Employer Requirements

Employers (both in-state and out-of-state) who employed six or more employees within Massachusetts during the past 12 months are required to complete the HIRD form.

An individual is considered to be an employee if the employer included this individual in their quarterly wage report to the Department of Unemployment Assistance (DUA) during the past 12 months.

Employers are required to complete the HIRD form if they reported six or more employees (includes all employment categories) in any DUA wage report during the past 12 months.

For out-of-state employers that are not required to file a quarterly wage report to the DUA, an individual is considered to be an employee if they are hired for a wage or salary in Massachusetts to perform work, regardless of full-time or part-time status.

Employers that are no longer in business are not required to file the HIRD form.

Click here for HIRD FAQs from the state webpage for additional information.

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