Mass. tab for private sector healthcare rises

Employees still rely on public programs to tune of $636m

The state's bill for providing healthcare to employees of large companies increased 14 percent in the last fiscal year, to $636 million, according to a report released yesterday.

The state report shows that while healthcare reform has extended coverage to thousands of people in Massachusetts, many employers still rely on state programs to provide healthcare benefits for their workers. The findings also underscore what is likely to become the next battle in the ongoing implementation of healthcare reform: getting employers to contribute more toward health insurance, even for part timers and seasonal help.

"There are a lot of companies that have set up their employment-benefit systems so the state pays for their workers' healthcare," said Brian Rosman, research director for Health Care for All, an advocacy group that helped establish the healthcare reform law. "They ought to pay some of the freight."

The healthcare reform law is intended to provide insurance coverage to all state residents. It has expanded government programs, such as MassHealth, the state Medicaid program, allowing more low-income residents to qualify for free coverage. The law has also created new coverage, such as state-subsidized and low-cost insurance plans provided by commercial health plans.

But the law also established a minimum standard under which a company would be deemed to provide a "reasonable" contribution to healthcare coverage - if 25 percent of a company's employees enrolled in a company plan or if the firm paid 35 percent of the premiums. Those that didn't meet that threshold must pay $295 per employee into a pool for the uninsured.

Yesterday, some advocates said the Patrick administration should raise those levels, so companies have to contribute more or pay the annual fee.

"The administration has to raise the threshold," said the Rev. Hurmon Hamilton, president of the Greater Boston Interfaith Organization and pastor of Roxbury Presbyterian Church. "It is socially offensive for Wal-Mart to be making millions of dollars in Massachusetts and have employees who facilitate that profit be kept healthy by the state. That's what I call freeloading."

Wal-Mart Stores Inc., the world's largest retailer, is the top company on the list. The state found 5,021 Wal-Mart employees used state health coverage at a cost of nearly $14 million in the 12 months ended June 30, 2007. That includes care provided to dependents of employees, but does not count employees without Social Security numbers.

Other large employers on the state's list include Stop & Shop Supermarket Cos., the May Department Stores Co., now part of Macy's Inc., and Shaw's Supermarket Inc. Governments are also on the list: the state is third, with 3,320 employees, and the City of Boston is 10th with 1,803.

Rosman said his group is considering other ways to get businesses to pay more for healthcare coverage, such as an assessment based on the annual study.

"When you use the state's water, they send you a bill," said Rosman. "Maybe if you use the state's healthcare, they should also send you a bill, and you should pay for some of it."

Richard C. Lord, chief executive of Associated Industries of Massachusetts, the state's largest business lobby, said he would oppose efforts to raise the standards set by the Romney administration that determine when a company makes a "reasonable" contribution to employees' healthcare.

"Healthcare reform was the result of a delicate balance of interests," said Lord, "and up to now it has the support of the business community. We want to continue to support it and I don't think we should be changing the rules at this point."

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