Employer Fair Share and the Mass Exodus?

We heard a very curious argument at a State House hearing last week. The bill was H. 2351, sponsored by Representative Randy Hunt (R-Sandwich). This bill would increase the threshold for the number of employees subject to the Employer Fair Share requirement to 50 workers. Under the compromise the led to the passage of chapter 58, firms with 11 or more workers are subject to the fair share requirements, although the test is stricter for employers with over 50 workers (the conjunction junction regulation).

We opposed this bill, and presented our arguments in a written statement (pdf). We reminded the legislators that Chapter 58’s foundation is shared responsibility, and that medium-sized firms have stepped up and added coverage. We noted that “the majority of business owners in Massachusetts support health reform and covering their employees with coverage – interestingly, even if they are not currently offering coverage. According to a 2008 Blue Cross Blue Shield of Massachusetts Foundation report, 64% of firms that do not offer coverage either strongly believe or somewhat believe that ‘all employers bear some
responsibility for providing health benefits to their workers.'”

But here’s the strange part. Because national health reform imposes its much different employer free rider surcharge only on firms with 50 or more workers, Rep. Hunt argued that his proposal was a jobs bill, not a health bill. According to State House News, Rep. Hunt said border communities will see an exodus of small businesses within the next three years if Massachusetts fails to relax the requirement that companies with 11 or more employees offer health plans for their workers.

Really?

If this were true, however, Massachusetts businesses would have already flocked to other states when the state fair share requirement was implemented in 2007. We haven’t seen this happen.

There’s no doubt that rising health care costs are hurting small businesses as much as any sector. However, shared responsibility between businesses, individuals, and government is necessary to realize universal coverage and successful cost containment reform. Comprehensive payment and delivery system reform legislation will work to lower health care costs, lessening the burden on businesses and consumers. We all need to contribute our fair share in order to continue the success of Chapter 58.
– Amelia Russo and Brian Rosman

About HCFA

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