Subsidized care costs state $794m
Companies relying on Commonwealth for health coverage
The state's bill for providing healthcare to employees and their families who work for large companies increased 24.6 percent to $793.7 million in the last fiscal year, according to a report released yesterday.
The report showed that while the state's landmark 2006 health initiative extended coverage to thousands of Massachusetts residents, many employers - particularly large retailers - continue to rely on state subsidy programs to provide health benefits to workers.
Overall, the number of employees and their dependents covered by state programs increased 12 percent in 2008, compared to 2007.
That jump is likely to reignite the debate about whether employers should pay more to the state for their workers who are receiving subsidized care.
"Increasingly, employers are getting tremendous benefits under health reform," said Lindsey Tucker, policy manager at Health Care for All, a large consumer group that helped create the 2006 law.
"The question is not whether employers are doing their fair share for the employees they are covering," Tucker said, "it's whether they are doing their fair share for their employees the state is covering."
The law sets a minimum standard for company contributions toward healthcare coverage, requiring companies with 10 or more full-time employees to have 25 percent of workers enrolled in a company plan or pay 33 percent of workers' premiums. Companies with more than 50 employees must meet both requirements. Those that don't meet the thresholds must pay $295 per employee into a pool for the uninsured.
Health Care for All is backing legislation that would require employers to contribute more, a proposal criticized by the state's largest business trade group, Associated Industries of Massachusetts, which also played a large role in shaping the state law.
"When we designed healthcare reform, we tried to strike a balance in terms of what employers responsibilities should be, and also tried to make sure we weren't placing Massachusetts employers at a competitive disadvantage," said AIM's chief executive, Richard Lord.
"We have seen that healthcare reform is supported by most employers," Lord said. "I worry that if we start tinkering with the law, that support could erode."
The law requires nearly everyone to have health insurance or pay a tax penalty. But third on the list of employers with the most workers enrolled in public health coverage is the Commonwealth of Massachusetts, with 3,785 employees - up 465 from last year.
Sarah Iselin, commissioner of the Division of Health Care Finance and Policy, the agency that produced the report, said the state provides generous health benefits, compared to many employers, and that overall, the percentage of workers not covered by state plans is less than 5 percent of the employees.
Kay Lazar can be reached at klazar@globe.com. 
