State OK's disputed health plan rules

Despite impassioned testimony from healthcare advocates and union officials for a higher threshold, the Romney administration yesterday finalized rules that allow businesses to avoid a $295 per employee fee by making relatively modest contributions to their employees' healthcare.

The state decided that companies with 11 or more full-time employees don't have to make the payments if at least one-quarter of their employees sign up for a company health plan, or if employers pay at least one-third of the cost of an individual's premium. The provision, part of the state's healthcare reform law, takes effect Oct. 1.

The decision to ratify the rules proposed in June angered healthcare advocates and could lead to a showdown between Governor Mitt Romney and members of the Legislature who also want the threshold for a ``fair and reasonable" contribution to health insurance set higher.

``We received a lot of excellent testimony that helped us make important clarifications to this regulation," said Amy Lischko , commissioner of the Division of Health Care Finance and Policy, which set the new rules, in a statement.

John McDonough , executive director of Health Care for All, said businesses should be required to pay more toward their employees' insurance. ``This is not what the Legislature intended when it directed firms to pay the minimal $295 assessment if they fail to provide `fair and reasonable' coverage," he said. ``Throughout this process, the Romney administration has only tried to minimize business responsibility."

The healthcare reform law is intended to extend health insurance coverage to Massachusetts residents lacking it by requiring businesses to offer insurance and individuals to buy it, or face penalties. The assessment on companies is intended to function as an incentive for them to offer quality health insurance to their workers, and to raise funds to pay for free care used by those without insurance.

Two key architects of the health insurance plan, Senator Richard T. Moore and Representative Patricia Walrath , have each written letters to the state arguing the proposed rules were inadequate.

``An employer who is not paying 50 percent of insurance premiums is not doing their fair share," said Moore, a Democrat of Uxbridge, in a recent interview. ``Fifty percent doesn't seem that hard."

Business groups, including Associated Industries of Massachusetts and the Massachusetts Business Roundtable, praised the proposed standards when they were first proposed.

Meantime, the healthcare agency said yesterday that it was postponing action on another crucial health reform rule, which would define how much companies that don't contribute to healthcare would be required to pay if their employees sought free care. Those companies would be responsible for a portion of the cost of uncompensated care if an employee or his or her dependents incurred significant medical bills, but the percentage must still be set by the state.

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