Massachusetts Proposes Changes to Health Reform Rules

More employer plans will likely meet requirements of Massachusetts’ health care reform law if draft rules approved Thursday, July 10, are implemented.

The rules were unanimously approved by the Massachusetts Health Insurance Connector Authority board, the state agency charged with implementing key elements of the 2006 law.

The landmark law requires that state residents be enrolled in health plans that meet certain design standards. Individuals, including employees, who are not enrolled in plans meeting so-called minimum creditable coverage standards could be fined more than $900 a year.

The new rules, which aren’t likely to be finalized until October, would replace rules approved last year by the board.

The most significant change involves the ability of employers to combine health plans through which employees receive coverage, making it more likely the employees receive creditable coverage. That ability to combine applies directly to high-deductible health plans.

To meet the creditable coverage standard, an annual deductible for single coverage cannot exceed $2,000 and can’t be any higher than $4,000 for family coverage. That had posed a problem for many high-deductible plans linked to health reimbursement arrangements with deductibles exceeding the $2,000 and $4,000 maximums.

Under the draft rules, though, any employer contributions to the HRA would be recognized as an offset to the deductible, increasing the chances that the plan would satisfy the coverage requirements.

In the case of high-deductible plans linked to health savings accounts, the plans automatically would pass the minimum creditable coverage requirement in 2009. Starting in 2010, like HRAs, employer contributions to employees’ HSAs would be recognized to determine whether the plans met the creditable coverage rules.

Another change approved by the board eases a requirement that health plans that impose a deductible provide three annual preventive visits for those with single coverage and six annual visits for those with family coverage before a deductible is charged. Instead, the new rules would also allow plans to meet the requirement by providing a schedule of preventive visits that meets nationally recognized standards.

Since enactment of the Massachusetts law, about 350,000 previously uninsured state residents have obtained health insurance coverage, with nearly 175,000 people insured through a program that pays or heavily subsidizes premiums for those with low incomes.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.