Employers/Employees

Requires that Health Insurance Responsibility Disclosure (HIRD) forms, which employers with 11 or more full time equivalent employees are required to submit to the Division of Health Care Finance and Policy (DHCFP) to verify that they provide section 125 plans and to verify that employees who declined employer sponsored insurance have alternative coverage, be shared with the Department of Revenue, the Commonwealth Health Insurance Connector Authority and the Health Care Access Bureau within the Division of Insurance for enforcement purposes.

Any individually identifiable information will not be public record.

Amends the definition of “eligible individual” to restrict eligibility for individual coverage to individuals who are not seeking to replace employer-sponsored coverage that complies with minimum creditable coverage standards.

Defines "qualified association" to include a Massachusetts nonprofit or not-for-profit corporation or organization focused on advancing the occupational, professional, trade, or industry interests, other than obtaining health insurance, of association members.

The organization must be active for at least 5 years before seeking qualified association status and must have at least 100 members, including individuals or small businesses that are actively involved in the organization and attained membership without regard to health status.

Defines "small business group purchasing cooperative" that may be used interchangeably with "group purchasing cooperative" to indicate a nonprofit or not-for-profit corporation or association, certified as a qualified association, that negotiates health coverage for all its members with one or more health plans.

Defines "wellness program" or "health management program" to indicate a program designed to improve the overall health of participants.

Requires that the age rate adjustment factor, used by health plans to calculate rates for eligible individuals and small groups, be applied on a year to year basis in order to more evenly distribute the rate of increase. In addition to age, an insurer may also calculate rates based on an individual’s or small group’s business industry, participation rate of members, wellness program discount, and tobacco use. The maximum premium rate offered to members cannot exceed 2 times the lowest premium rate offered to members within a particular class of business.

Allows the Commissioner of the Division of Insurance to conduct a study to determine whether rating factors that an insurer may use to determine annual base premium rates or individual group premiums for plans offered in the small group health insurance market inappropriately increase costs in relation to the risks of a particular small group. The Commissioner may adopt changes to regulations as necessary each July 1 for rates effective the following January 1 to modify rate adjustment factors.

When determining annual base premium rates, an insurer may consider an individual’s or small group’s business industry, age of members in a particular class of business, participation rate of members, wellness program discount, and tobacco use of its participants. The maximum premium rate offered to members cannot exceed 2 times the lowest premium rate offered to members within a particular class of business.

In general, after a carrier considers all rate adjustment factors, the base rate of any plan an insurer offers to individuals and small groups must fall within rate bands ranging between 0.66 and 1.32.

A carrier, however, may also consider certain additional base rate adjustment factors that establish a base rate outside of the rate band. These factors include: geographic region, group size, the relative actuarial value of the available health plan compared to the value of other health plans offered within a particular class of business, and the average relative actuarial value of at least 4 different base rate categories, including: single, 2 adults, 1 adult and children, and family. The Commissioner will establish at least five distinct regions for the purposes of area rate adjustments. Any additional adjustment factors must apply uniformly to every eligible member of a particular group.

Creates a market for up to six small business group purchasing cooperatives to operate in the state. The purpose of creating the cooperatives is to allow small businesses to combine purchasing power and to seek lower premiums as a larger group. Division of Insurance (DOI) must establish an application and certification process for the cooperatives and must certify up to six applications that meet DOI requirements. Approved group purchasing cooperatives may cover up to a combined number of 85,000 covered lives at any given time.

Plan benefits must include those mandated by the state as well as access to a wellness program. At least 33% of covered employees of each cooperative must commit to enrolling in the health management programs the cooperative must provide. A cooperative may not deny coverage to any employee or dependent of association members based on health condition, age, race, or sex. Premiums for a particular plan offered to a member of a cooperative must be equal to or less than premiums an insurer would charge that small business if it was seeking benefits outside of the cooperative.

Products may be sold through brokers, licensed agents and the Connector.

Within 2 years of the first small business group purchasing cooperative certification, DOI must report to the legislature on the cost savings to members of the cooperatives, any impact the cooperatives have on the state risk pool and premium costs in the merged market, and whether DOI should continue certifying cooperatives.

Requires any insurance carrier that has a combined total of at least 5,000 eligible individuals, employees, and dependents, and wishes to continue offering health plans in the individual and small group market, to file a plan with each group purchasing cooperative if the group purchasing cooperative requests such health plan proposal for its next plan year. Any health plan option offered to a cooperative must include all state mandated benefits, and must apply the same preexisting coverage limitations, waiting periods, open enrollment periods and rating rules as applied to small groups outside the cooperative.

Directs the Health Connector, in coordination with the Department of Public Health, to create a small group wellness pilot program to encourage small businesses to implement employee wellness incentive programs. The Health Connector shall provide funding and technical assistance to eligible qualified small businesses for program implementation. Funding for the subsidy program is limited and subject to state appropriation, so the Health Connector may cap enrollment in the program if funds are insufficient to meet the costs of enrolling new employers.

The Health Connector must establish regulations necessary to implement this program and annually report to the legislature on the enrollment and impact of small group wellness incentive programs.