Governor Deval Patrick said Thursday that he will not block the repeal of a state mandate for employers to provide health insurance to their workers or pay a penalty, though the Obama administration last week announced a delay in the federal program that was supposed to take its place.
The state’s landmark 2006 health care law included a provision, referred to as the “fair share employer contribution,” requiring that employers with more than 10 workers provide coverage or pay the state $295 per employee.
Some business groups saw the requirement as onerous and initially pushed to loosen the law, but the Patrick administration agreed to eliminate it because a similar federal mandate was set to take effect in January. The repeal was included in the 2014 budget, which Patrick must act on tomorrow.
However, the Obama administration announced a one-year delay on the federal employer mandate, which affects businesses with more than 50 employees but with steeper fines, between $2,000 and $3,000.
During a monthly segment on WGBH’s Boston Public Radio, Patrick said he won’t veto the state repeal. He pointed to a separate per-employee surcharge that businesses already pay to support the state’s Medical Security Program, covering people who are on unemployment insurance.
That program will being eliminated in January, and most enrollees will be eligible for coverage through Medicaid or the state’s subsidized insurance market. But the surcharge will remain, at $50.40 per employee, and will be used to support subsidized coverage more broadly. Patrick said that the surcharge raises about five times as much money as the employer mandate did.
“I think as long as the federal mandate isn’t delayed beyond that one year, we’ll be fine,” Patrick said. “Experience taught us that, here in the Commonwealth at least, employers aren’t deciding to offer health insurance to their employees on account of the mandate. It’s because the programs make sense and they work.”
Consumer group Health Care for All had pushed for Patrick to veto the repeal and allow the state mandate to stand, citing concerns that the federal law could be delayed further. Executive Director Amy Whitcomb Slemmer on Thursday afternoon called the repeal “a significant step back from the promises that were made” in the 2006 law, which also mandated that most individuals in Massachusetts have insurance or pay a fine.
She said the group will monitor coverage rates in the year ahead to see what impact, if any, the repeal may have.
“We hope employers will continue to do the responsible thing and offer their employers coverage,” she said.