Federal & State Regulations | Health plans - Massachusetts

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Summary of differences between federal and state regulations

Employee health plans are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).

Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply.

Massachusetts General Laws, as they apply to group health plans, include the following provisions (Chapter 175):

If the plan covers hospital and surgical expenses, it must cover mental health on a nondiscriminatory basis, including rape-related mental or emotional disorders to victims of a rape or victims of an assault with intent to commit rape. (§47B)
If the plan covers hospital and surgical expenses, it must cover children and adolescents under the age of 19 for the diagnosis and treatment of non-biologically-based mental, behavioral, or emotional disorders on a non-discriminatory basis. (§47B)
If the plan covers hospital and surgical expenses, and dependents, it must cover newborn infants immediately from the moment of birth and adoptive children immediately from the date of the filing of a petition to adopt. The coverage is to include medically diagnosed congenital defects and birth abnormalities or premature birth; special medical formulas for phenylketonuria, tyrosinemia, homocystinuria, maple syrup urine disease, propionic acidemia, or methylmalonic academia; and lead screening. (§47C)
If the plan covers hospital and surgical expenses, and dependents, it must include preventive and primary care services for children to include physical examination, history, measurements, sensory screening, neuropsychiatric evaluation and development screening, and assessment. These are to take place at the following intervals: six times during the child's first year after birth, three times during the next year, annually until age six. Such services shall also include hereditary and metabolic screening at birth, appropriate immunizations, and tuberculin tests, hematrocrit, hemoglobin or other appropriate blood tests, and urinalysis as recommended by the physician. (§47C)
If the plan covers hospital and surgical expenses, and dependents, it must cover medically necessary early intervention services, for children from birth until their third birthday, and include newborn hearing screening test to be performed before the infant is discharged from the hospital or birthing center. (§47C)
If the plan covers hospital and surgical expenses, it must cover cardiac rehabilitation. (§47D)
If the plan covers hospital and surgical expenses, it must cover the services of a certified nurse midwife. (§47E)
Group plans must cover nonprescription enteral formulas for home use when ordered by a physician, and which are medically necessary for the treatment of malabsorption caused by Crohn's disease, ulcerative colitis, gastroesophageal reflux, gastrointestinal motility, chronic intestinal pseudo-obstruction, and inherited diseases of amino acids and organic acids, and include food products modified to be low protein. (§47I)
If the plan covers prescription drugs, it must cover off-label drugs used for the treatment of cancer even if the drugs are not approved by the FDA. (§47K)
If the plan covers hospital and surgical expenses, it must cover supplies that are medically necessary for the diagnosis or treatment of insulin-dependent, insulin-using, gestational, and non-insulin-dependent diabetes. (§47N)
If the plan covers prescription drugs, it must cover off-label drugs used for the treatment of AIDS/HIV even if the drugs are not approved by the FDA. (§47O)
Group plans must cover services rendered by a certified registered nurse anesthetist or nurse practitioner. (§47Q)
Group plans must cover licensed hospice services to terminally ill patients with a life expectancy of six months or less. (§47S)
If the plan covers hospital and surgical expenses, it must cover scalp hair prostheses for hair loss as a result of the treatment of any form of cancer or leukemia. (§47T)
Effective 1/1/2011, if the plan covers hospital and surgical expenses, it must cover the diagnosis and treatment of autism spectrum disorders. The policy must not contain annual or lifetime dollar or unit of service limitations on coverage for autism spectrum disorders that is less than such limitations imposed on coverage for physical conditions.
Plans must cover services performed by registered dentists (§108B)
Plans must not discriminate on the basis of suspected, alleged, or confirmed exposure to diethylstilbestrol (DES). (§108C)
If the plan provides for reimbursement for chiropractic services, plan participants must be reimbursed for such services, whether performed by a medical physician or a chiropractor. (§108D)
Discrimination based on the plan participant being a victim of abuse is prohibited. (§108G)
If there are at least 25 employees who contribute to a health insurance contract that restricts selection of dental service providers must also offer optional dental coverage for services from any licensed dentist. (§110K)
Under Chapter 288, signed 8/10/10, small employers will be able to form cooperative health plans, which allow small businesses to band together to negotiate premiums with insurers. The Connector, along with the Department of Public Health, will provide subsidies to small businesses to initiate wellness programs for their workers.
Massachusetts Public Health regulations adopted final rules to align the Massachusetts external review process with federal requirements under the Affordable Care Act (ACA). See 105 CMR 128.400 et seq. Effective 9/15/2011.

Beginning July 1st, 2007, all Massachusetts residents age 18 and over must have health insurance. Every year, everyone will need to show proof of health insurance on their state income tax return. Without health insurance, individuals will face a stiff tax penalty. This penalty could be up to 50 percent of the amount of the cheapest health insurance plan offered through the Commonwealth Connector.

Employers with more than 10 employees who did not make a fair and reasonable premium contribution towards health insurance for their employees were subject to pay the Fair Share Contribution (FSC). This contribution was no more than $295 per employee per year. This was pro-rated for part-time employees. The amount was determined by the Director of Workforce Development and the Division of Health Care Finance Policy (DHCFP), and was collected by the Division of Unemployment Assistance (DUA).

Since the federal ACA provides for an employer fair share requirement, the FSC was repealed effective July 1, 2013.

Effective July 1, 2013, the full-time equivalent (FTE) threshold for fair share contributions rises from 10 to 20 employees and adds a provision that employees who have health insurance from other sources will not be included in the calculation of whether an employer is a contributing employer.

Employers with 11 or more employees must adopt and maintain a Section 125 plan that meets the regulations of the Commonwealth Connector. This is true regardless of whether employers offer health insurance to their employees. If employers do not offer a Section 125 plan, they may be subject to the Free Rider Surcharge. The amount of the surcharge will vary based on the number of employees, the utilization of the "free care pool" or the Health Care Safety Net, total state-funded costs and the percentage of employees enrolled in the employer health plan.

The requirement that employers with 11 or more full-time equivalent employees offer Section 125 plans as a way for non-benefits eligible employees to purchase health insurance using pre-tax income is incompatible with the federal Affordable Care Act. Employers that currently permit non-benefit eligible employees to use Section 125 plans to purchase individual plans on a pre-tax basis may leave those plans in place until the expiration of the employee's plans in 2014. For plan years starting in 2014, employers may no longer offer Secion125 plans that merit their non-benefits eligible employees to purchase their own on-group health insurance policies using pre-tax income. Section125 plans can continue to be offered to employees for other purposes, such as the purchase of group health insurance or other benefits.

Employers with more than 10 employees were to complete an Employer Health Insurance Responsibility Disclosure (HIRD) form and submit it to the DHCFP. Employers were to provide each employee with an employee HIRD form, and the employee had to complete it. Employers then collected the employee HIRD forms and retained them for three years. Collection of the HIRD forms was repealed effective July 1, 2013.

Effective January 1, 2014, MA employers with more than five employees will be assessed a per-employee Employer Medical Assistance Contribution (EMAC) fee. This fee will apply whether an employer offers health coverage or not. It is to be calculated by multiplying .36 percent of wages, but is capped at the unemployment insurance taxable wage base.

Effective January 1, 2008, sponsors of employment-sponsored health plans are required to provide (or arrange with service providers or insurance carriers to provide) a written statement annually on or before January 31 of each year, to each plan participant to whom it provided creditable coverage. This can be accomplished with the MA 1099-HC form.

Plan sponsors must also provide a separate report electronically verifying the statement to the Commissioner.

The statements and reports need to identify the carrier or employer, the covered individual and covered dependent, the insurance policy or similar numbers and the dates of coverage during the year. They must be limited to the minimum amount of personal information necessary, and not include information about previous or current diagnoses, treatments, or Social Security Numbers (such numbers may be included for the office of Medicaid, however).