The Massachusetts Health Connector and IRS Section 125 POP Plan

With all the focus on Federal Health Care Reform it’s easy to lose focus on the solutions some states are creating to take control of the issue in their respective state. Since 2006, Massachusetts has required its citizens to have health care. This landmark legislation has been praised throughout the country for being proactive and for addressing the needs of Massachusetts citizens. The embodiment of this initiative is the Massachusetts Health Connector, a service that links Massachusetts residents with the health care they need.

Massachusetts employers who have more than 11 eligible employees must create a Section 125 Plan to make health care available to their employees. If you have 11 or more employees and don’t offer a Section 125 Plan, you could be subject to a Free Rider Surcharge if your employees receive state-funded health care services. While this may seem like a burden, setting up a Section 125 plan is really a great deal for both you and your employees.

Why a Section 125 Plan is a Win-Win?

A Section 125 POP Plan is often called a Premium Only Plan or cafeteria plan, and is governed by Section 125 of the Internal Revenue Code. When benefits are offered through a Section 125 Plan, the premiums that employees pay are deducted from their pay on a pre-tax basis. That means each employee’s taxable income is lower, as is their FICA and Medicare tax contribution. For the employer, you benefit from your portion of matching contribution too. Employers also save on Federal Unemployment Tax and depending on the state or county there could also be additional tax savings.

Even if you have fewer than 11 eligible employees and aren’t required to set up a Section 125 plan, the tax-savings alone could make it worth your while!

How Do I Set Up a Section 125 Plan?

For Massachusetts Employers, the Connector has a sample document that you could review or have your attorney create a document and keep in compliance. Or you could hire a professional document administration company that will create and maintain your Section 125 Plan with ease. They can provide signature-ready plan documents customized for you and your needs, and in full compliance with IRS rules, in as little as fifteen minutes.

Affordable Health Insurance in Massachusetts

Massachusetts is a unique state when it comes to health care coverage. Massachusetts has become the model for health care reform for the nation. Of all states, affordable health insurance in Massachusetts is the most possible. There are cost-efficient public options subsidized by the state as well as many private and employer-sponsored plans from which to choose.

Affordable Health Insurance in Massachusetts: Statistics

The average annual premium for an employee-sponsored health plan in Massachusetts after employee contribution was $1,110 in 2009. The average cost of one day in a Massachusetts hospital that would come out of your pocket if you do not have health insurance is over $2,100 per day. Massachusetts is in the top 3 in the U.S. when it comes to physicians, obesity, immunization, infant mortality and occupational fatalities, which makes the Massachusetts one of the healthiest states in the U.S.

Affordable Health Insurance in Massachusetts: The Health Connector

Massachusetts is the most insured state in the nation. Over 97 percent of residents have some form of health care coverage. Enacted into law in April of 2006, Massachusetts health reform has pursued the goal of near-universal health care in the state and has achieved it for the most part. The law requires adults who can obtain affordable health insurance in Massachusetts to do so. The Health Connector is a state agency of Massachusetts that aides residents of the state find affordable health care insurance and avoid tax penalties. Because health care coverage is mandatory, with some exceptions, tax penalties may be enforced if you fail to gain coverage. The Health Connector provides information concerning the public plans available, the cost of those plans, and qualification information for subsidized plans and the health care insurance exemption.

Affordable Health Insurance in Massachusetts: Commonwealth Choice

Commonwealth Choice is a collection of six unsubsidized Massachusetts health insurance plans arrived at through a competitive bidding process. They are available to individuals, families and employers and have been approved by the Health Connector. The plans available range in coverage options and overall cost and are provided by the following Massachusetts medical insurance companies.

Blue Cross Blue Shield of Massachusetts
Fallon Community Health Plan
CeltiCare
Health New England
Neighborhood Health Plan
Tufts Health Plan
Harvard Pilgrim Health Plan

Affordable Health Insurance in Massachusetts: Commonwealth Care

Commonwealth Care is a public plan that calls for complete subsidization of comprehensive Massachusetts health insurance for adults who earn up to 150 percent of the federal poverty level. The children of parents earning up to 300 percent of the federal poverty level also get completely subsidized coverage. If earning between 150 and 300 percent of the federal poverty level, partial subsidies are available for qualifying adults. Additional qualifications require you to be a Massachusetts resident and not be eligible for employee-sponsored medical insurance or any other public option.

Benefits For Massachusetts Health Insurance

The Massachusetts Health Care Reform was a law that had been enacted in the year 2006 for ensuring the safety of Massachusetts health insurance. According to the norms of the Massachusetts Health Care Reform, each and every member of the state of Massachusetts should be covered under Massachusetts health insurance policies.

There are provisions of free health or medical insurance for residents who earn a lesser amount than 150% of the country’s poverty line. It also provides partly subsidized health care services for those who earn as much as 300% of the federal poverty level. The extent of the subsidy is something that depends on a sliding scale based on the income of the individual. The reform is expected to cover about 440000 residents.

According to the norms of the Massachusetts Health Care Reform, the Health Connector, a liberal public body was set up. It is also called the Commonwealth Health Insurance Connector Authority. Its function is to offer subsidized coverage as well as enable purchase and selection of private insurance policies for small businesses and self employed individuals.

Residents of the state can obtain Massachusetts health insurance benefits such as tax penalty in case they are unable to obtain insurance. In 2007, the tax filers, who could not qualify for a health or medical insurance plan that was affordable for them, lost an exemption of $219 on the income tax. In the following year, the penalties were increased by monthly increments, depending on 50% of health insurance costs.

The Massachusetts Health Care Reform law had been enforced as Chapter 58 of Acts of 2006. The aim was to provide accessibility to accountable as well as quality health care standards. The bill was amended in 2006 and 2007 for making technical clarifications in the statute.

As far as the reform coalitions are concerned, there had been political leaders who advocated for implementation of major health reforms in Massachusetts. The aim is to expand the extent of coverage as well as draw attention to the number of people who are yet to be insured medically. The Governor of Massachusetts had made it clear that there should be a plan that covers all uninsured individuals in the state.

The coalition of ACT or Affordable Care Today introduced a bill for expanding the SCHIP and Medicaid coverage for Mass Health as well as highly subsidized programs. The aim was to increase the coverage subsidy and help employees out by providing medical coverage at affordable rates.

With signatures gathered from the common people, the proposal for a comprehensive health insurance coverage plan was placed. A program entitled ‘Roadmap to Coverage’ was sponsored by the Blue Cross Blue Shield for extending the coverage to every person in the commonwealth.

The federal government pressurized the state authorities to make certain alterations to the federal rule that permits the state to operate an extensive Medicaid program. According to the previous waiver, federal funds worth $385 million were being credited to the state for implementing it wholly in healthcare.