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CCH® BENEFITS — 1/11/08

Employers Will Spend $175 Million Under Massachusetts Health Care Reform Act

From Spencer's Benefits Reports: Massachusetts employers will spend an estimated $175 million more per year for health insurance under the state’s health care reform law, according to the Massachusetts Taxpayers Foundation, a nonprofit research organization. According to the report, An Analysis of the Essential Role of Employers in Massachusetts Health Care Reform, the increase includes $150 million as more employees accept coverage and $24 million for employers to raise the level of prescription drug benefits offered to employees.

In 2006, Massachusetts enacted the Health Care Reform Act, which is intended to reduce by as much as 95% the state’s uninsured population, estimated at 550,000. The law requires individuals, businesses, and the government to take steps to ensure that every Massachusetts resident is covered.

The Health Care Reform Act mandates that all individuals in Massachusetts obtain and maintain a level of minimum creditable coverage. Because of this mandate, the Massachusetts Taxpayers Foundation estimates that when family coverage is taken into account, about 28,500 to 31,000 employees will enroll in their employers’ health care plans, which means that 42,068 to 51,460 Massachusetts residents will be newly insured through employer-sponsored health care plans. The price tag for this coverage is estimated at up to $157 million.

The report stated that employers will be under pressure to increase the levels of coverage that is offered to employees, so that employees will be able to maintain the minimum creditable coverage level. This is especially true with prescription drug benefits—the report estimated that the cost for employers to meet the prescription drug requirement will be $24 million.

For more information, visit http://www.masstaxpayers.org.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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