Business leader suggests health law too easy on firms

One of New England's top business leaders says companies should contribute more to employees' health insurance than is required by the state's healthcare revamp law.

Robert A. Baker , president of the nonprofit Smaller Business Association of New England, said most of his 700 members already contribute more to employee health coverage than the standards require. The reform plan signed last year by former governor Mitt Romney specifies that companies are exempt from a $295 per employee annual assessment if they make a "fair and reasonable" contribution to employees' healthcare. Specifically, businesses can avoid the fee if 25 percent of their workers participate in a company-sponsored plan, or the companies pay at least one-third of the insurance premium.

"Most of our people provide 50 to 80 percent premium contribution, and very few provide less than 50 percent," said Baker. "Thirty-three percent seems to be abnormally low if you want to keep good people working for you." Fifty percent, he said, "should be the standard."

Baker said he was expressing his personal opinion and that the association's board hasn't taken a formal position on the issue.

The healthcare overhaul law is intended to extend insurance to all Massachusetts residents. Individuals will be required to purchase a policy starting July 1, and businesses with more than 11 employees are expected to make a "fair and reasonable" contribution to employee healthcare.

But advocates complained last fall that the definition of "fair and reasonable" would neither compel businesses to offer more generous health benefits, nor raise enough money to help pay for free care at hospital emergency rooms.

Baker's comments come as legislators and healthcare advocates are pushing a bill in the state Senate that would raise the minimum levels for employers to avoid paying the $295 assessment, and make other changes to the revamp law.

"I'm pleasantly surprised to hear Mr. Baker's comments," said the bill's sponsor, Senator Mark Montigny , Democrat of New Bedford. "Anybody who looks at our law and calls this shared responsibility is mistaken. There's been too much celebration and not enough expansion of coverage."

Montigny's bill, dubbed "An Act Strengthening Health Reform," would exempt companies from the $295 assessment only if 50 percent of its employees sign up for health coverage, or the company contributes 50 percent toward an individual premium. The bill, incorporating proposals from Affordable Care Today, an advocacy group, would also enhance the reform law's subsidized insurance coverage, called Commonwealth Care. Some of the proposed changes include adding dental coverage; providing long-term smoking-cessation services; covering medically necessary ambulance rides, and reducing premiums.

"The 50 percent contribution to premiums is a very reasonable figure," said Melissa Shannon , director of government affairs for Health Care for All, an advocacy group that helped shape the reform law. "The legislation is very clear about a strong requirement on individuals, but it left the requirement on employers weak. This would help to bring that more in balance."

But some business leaders said it's not necessary to toughen the minimum requirements for "fair and reasonable" contributions to employees' health insurance coverage.

"I disagree strongly," said Rick Lord, chief executive of Associated Industries of Massachusetts, the state's largest business lobbying organization. "We're already in the first year of implementation of the law. To change the thresholds now sends a bad signal to the business community."

Lord said most health insurance companies already require employers to pay more than 33 percent of their workers' monthly premiums. In addition, he said, seasonal businesses such as amusement parks and ski resorts would be unfairly penalized. Such businesses may provide generous benefits to year-round employees, but typically do not for part-time workers. Raising the standards for coverage would likely mean those companies would be assessed the $295 fee for part-time employees, Lord said.

Jeffrey Krasner can be reached at krasner@globe.com.