Under the 2006 law, Massachusetts businesses with more than 11 employees or their equivalent must offer a “fair and reasonable contribution” toward coverage or pay the state a “Fair Share Assessment” of $295 per full-time employee. The law also requires businesses to help employees pay for premiums using pretax dollars.
Under the federal law, by contrast, businesses with more than 50 employees will face penalties (called a “shared responsibility payment”) equal to $2,000 per full-time employee, with some exclusions. Tax credits are intended to help smaller businesses get coverage for workers.
Almost 79 percent of nonelderly insured Massachusetts residents now receive health insurance through their employers. In 2010, under the most recent data, Massachusetts had about 188,000 employers, 22,324 of which had 11 or more full-time equivalent employees and were potentially subject to the tax penalty, according to the state Division of Health Care Finance and Policy. Of that figure, 1,017 employers faced penalties, with restaurants making up the vast majority. Between 2006 and 2010, the penalties brought in an average of $15.7 million per year to the state, which helped offset costs for the entire law.
Businesses that rely on part-time or seasonal workers have reported the most problems in trying to comply. In the Cape Cod town of Wellfleet, where the local economy is tied to summer tourism, John Vincent Jr. says he’s struggled to keep his drive-in movie theater, mini-golf, and snack bar business in compliance.
Of the 50 people on payroll, the majority are college- or high-school-aged students doing summer work, he says. He also has four year-round employees, whose health benefits are paid 100 percent. That is down from 10 year-round employees a decade ago, a drop he blames on rising health-care costs, including double-digit premium increases, he says.