Fewer residents to face tax penalty under proposed new rules

State regulators are considering proposed changes to health insurance rules that could result in fewer residents facing a tax penalty for not having health insurance.

The Connector Authority board today weighed several potential changes to the complex standard it uses to determine whether health insurance is affordable for individuals, couples and families, a standard that is also used to decide who will face a tax penalty for not having coverage.

The state's landmark health insurance law requires nearly everyone to have insurance, or face a stiff tax. The law also directs the Connector Authority to update annually the standard it uses to define affordable health insurance.

With health care costs continuing to rise, and incomes stagnant or falling, there is a debate between advocates and some regulators about easing the standards. Some regulators say loosening the rules too much would undermine the state's health law, because it will result in fewer people being required to purchase health insurance. A major goal of the state's 2006 law was to extend coverage to as many residents as possible.

But consumer advocates say the intent of the law was to also make health insurance more accessible, and, they say, rising costs are increasingly hurting too many residents.

Under the proposals considered by the board, several new categories of people could be exempt from the tax penalty, including couples under the age of 26 in Eastern  and Central Massachusetts who earn between $43,717 and $54,601 and can not find a policy with a monthly premium for less than  $307. Also exempt would be families in the Eastern and Central portions of the state who earn between $93,601 and $114,400, are between the ages of 30 and 44 years old, and can not find a monthly premium for less than $820.

In Western Massachusetts, large swaths of residents could be exempted from the tax penalty, including: families earning between $93,601 and $114,400 who are aged 30 to 44 and are unable to find something cheaper than $820 a month;  couples earning between $65,001 and $85,800, who are aged 40 to 49 and are unable to find plans for under $569 a month; and individuals earning $39,001 and $44,200 aged 27 to 39 for less than $228 monthly.

The board decided to seek public comments about the proposed changes and to vote on the issue at its March 11 meeting. Details of the proposals will be posted later today by the Connector on its website.