Summary: Employers with Massachusetts (MA) resident employees should be aware of certain MA state law health plan coverage requirements for state residents and also comply with upcoming employer health plan reporting requirements.
Read on for more information.
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:
An MCC-compliant plan for Massachusetts residents must adhere to the following plan cost-sharing limits for 2024 as captured in the table below:
Plan Cost-Sharing Item |
Coverage Tier |
2024 Limits |
2023 Limits |
Coverage Deductible |
Self-only |
$2,950 |
$2,850 |
Family |
$5,900 |
$5,700 |
|
Prescription Drug Deductible |
Self-only |
$360 |
$350 |
Family |
$720 |
$700 |
|
Maximum Out-Of-Pocket |
Self-only |
$9,450 |
$9,100 |
Family |
$18,900 |
$18,200 |
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.
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:
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.
Multistate employers sponsoring health plan coverage with Massachusetts resident employees are advised to take the following steps with their insurance carriers/TPAs:
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.
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.
The HIRD form will be available to be filled out electronically starting November 15 and must be completed by December 15 of the reporting year.
Risk Strategies is here to help. Contact us directly at benefits@risk-strategies.com.