Worcester State University
Payroll

 

HEALTH CARE REFORM ACT (07/01/07)


The Health Care Reform Act, effective July 1, 2007, requires the following:

·         all Massachusetts residents to purchase health insurance

·         all Massachusetts employers to help provide or finance their 
  employees’ health insurance

·         employers to allow employees to buy coverage with pre-tax
  payroll deductions

As a result of this new legislation, the Commonwealth has established a Section 125 ("cafeteria") Plan for the state's employees who are not eligible to receive state-subsidized health insurance through the Group Insurance Commission (GIC) -- that is, part-time, non-benefited employees -- to purchase health insurance on a pre-tax basis from the Commonwealth Choice Program available through the Commonwealth Health Connector.

·         Why are employees being asked to join health insurance plans?

·         What is a Section 125 plan?
·         Who is eligible?
·         What are my coverage options?
·         What is the enrollment period?
·         When will my coverage begin?
·         How do I enroll in a health insurance plan?
·         How will my paycheck be affected?
·         What if I am not paid on a bi-weekly basis?
·         What if I have several jobs within the Commonwealth?
·         What if I miss a payment?
·         Can I purchase a plan before my coverage begins?
·         Is an employee who is eligible for GIC coverage also eligible for 
           coverage under the Section 125 plan for non-GIC eligible
 
           employees during the two month waiting period before GIC 
           benefits begin?
·        
I already have Health Connector coverage. How do I transfer 
           my plan to the Commonwealth Plan?
·         Rules Regarding Payments/Delinquency

Why are employees being asked to join health insurance plans?

The Commonwealth of Massachusetts now requires all adults who can afford health insurance to have coverage. Employees not eligible for coverage through the Group Insurance Commission (GIC) should visit the Commonwealth Health Connector’s website at
www.mahealthconnector.org or call 1-877-MA-ENROLL to compare their health insurance options. Persons who are hearing impaired may use TTY service by calling 1-888-213-8163. The Commonwealth of Massachusetts’ Employer ID # is 149683.

What is a Section 125 plan?

Section 125 of the U.S. tax code allows employees to purchase various benefits, including health insurance coverage, on a pre-tax basis. This is called a Section 125 plan, or a cafeteria plan. Employers are not required to contribute to the purchase of these benefits. However, employees can still achieve significant savings by purchasing these benefits on a pre-tax basis through a Section 125 plan. The Commonwealth is making available a plan allowing employees who are not eligible for GIC coverage to purchase health insurance on a pre-tax basis through the Health Connector. Under the plan, payments for this health insurance would be deducted from an employee’s paycheck from the Commonwealth.

Who is eligible?

All Commonwealth employees (receiving a W-2 and paid through HR/CMS or e*mpac-UMass) not eligible for health insurance through the GIC are eligible to purchase coverage through the Health Connector on a pre-tax basis. Independent contractors, who are not employees of the Commonwealth, are not eligible for this Section 125 plan benefit.

What are my coverage options?

The Health Connector offers plans from six of the state’s major insurance carriers, including Blue Cross Blue Shield, Fallon Community Health Plan, Harvard Pilgrim Health Care, Health New England, Neighborhood Health Plan, and Tufts Health Plan. Each carrier offers at least three coverage options that offer varying benefit levels, cost sharing, and premiums to meet your needs. Visit
www.mahealthconnector.org or call 1-877-MA-ENROLL to compare the options. Persons who are hearing impaired may use TTY service by calling 1-888-213-8163. When choosing a plan, be sure to use the Commonwealth of Massachusetts’ Employer ID # 149683.

What is the enrollment period?

Eligible employees hired on or after August 1, 2007 will have 30 days from hire (or loss of GIC eligibility). Employees who do not enroll within 30 days must wait for the annual Open Enrollment Period, which will occur in May of each year, in order to pay on a pre-tax basis. If you miss the initial enrollment period, you may still purchase health insurance directly from the Health Connector on a post-tax basis.

When will my coverage begin?

Once an employee has enrolled, it will ordinarily take two pay periods for the employee to fully pay a month’s premium for health insurance through the Health Connector, and coverage will begin on the first day of the month after which the full premium has been paid. Employees who enroll later in the month should consider increasing their first deduction amount by contacting their payroll director, or making direct payments to the Health Connector, to expedite the start of the coverage period. Please see the following table for additional details on coverage start dates:

Hire Date

 Enrollment Period Ends

Election Completed

*Normal Coverage Start Date

**Early Coverage Start Date

August 1

September 1

Elect coverage by August 15


Elect coverage by September 1

October 1


November 1

September 1


October 1

September 20

October 20

Elect coverage by October 15


Elect coverage by October 20

December 1


January 1

November 1


November 1

October 5

November 5

Elect coverage by October 15


Elect coverage by November 5

December 1


January 1

November 1


December 1

*Normal Coverage Start Date represents the start date if the employee makes no changes to the deduction amounts or makes no additional post-tax payments

**Early Coverage represents the potential start date if the employee makes the full premium payment by making additional post-tax payments, increasing the first deduction amount, or both

How do I enroll in a health insurance plan?

Using the Commonwealth of Massachusetts’ employer identification number as login information (Employer ID # 149683), the employee should go to
www.mahealthconnector.org or call 1-877-MA-ENROLL to compare and select a plan. Persons who are hearing impaired may use TTY service by calling 1-888-213-8163.

Be aware that employees will be asked to enter the last four digits of their Social Security number, their date of birth and zip code which will be verified against the file sent from the payroll system, HR/CMS or e*mpac. This will complete verification so the employee can then compare and select a plan. If a mismatch occurs, employees will be directed back to their payroll office.

For pre-tax coverage, the selection of coverage must be made within the 30-day enrollment period. After 30 days, the login information provided by the Health Connector will no longer be valid.

As the table above indicates, electing coverage (or “shopping”) sooner will help expedite the start of payroll deductions and avoid any need for additional payments.

How will my paycheck be affected?

It is an employee’s responsibility to ensure that the monthly premium is being paid in full and that deductions are taken in a timely manner. The monthly deduction amount is based on the premium for the selected health insurance plan.

What if I am not paid on a bi-weekly basis?

Employees paid on an irregular schedule can request an additional prepayment amount through their department. The employee needs to ensure that sufficient deductions to cover the cost of the plan are taken prior to the benefit month.

What if I have several jobs within the Commonwealth?

Employees with multiple jobs must ensure that the payroll office deducts from the correct job record in HR/CMS. Employees will be responsible for oversight if they request splitting deductions over multiple job records.

What if I miss a payment?

The Health Connector will contact the employee for any balance due to collect the remainder of the monthly premium amount. Employees will need to make payment on a post-tax basis. Failure to pay the full premium amount will result in coverage being cancelled.

One-time adjustments and other changes to the deduction amount can be made but only for coverage periods related to employment by requesting that the employee’s payroll director enter in an additional deduction amount. Make-up deductions are allowed; however, employees should be aware of the Health Connector’s rules regarding payments (see section on Rules Regarding Payments/Delinquency).

Employees with multiple jobs or not on regular work schedules will need to closely manage their paychecks and adjust deduction amounts or make additional payments as needed.

Can I purchase a plan before my coverage begins?

Employees who are waiting for benefit coverage to begin can purchase coverage directly from the Health Connector on a post-tax basis by visiting www.mahealthconnector.org
and purchasing a plan through the “Individual and Family” shopping option. They may also call 1-877-MA-ENROLL. Persons who are hearing impaired may use TTY service by calling 1-888-213-8163. All such activity will occur outside the Commonwealth’s Section 125 plan and will not be deducted through payroll. Thus, it will not receive the pre-tax benefit.

Is an employee who is eligible for GIC coverage also eligible for coverage under the Section 125 plan for non-GIC eligible employees during the two month waiting period before GIC benefits begin?

No. This Section 125 pre-tax benefit plan is only available to employees who are not eligible for GIC coverage. However, employees who are waiting for GIC coverage to begin can purchase coverage directly from the Health Connector on a post-tax basis (see answer to previous question).

I already have Health Connector coverage. How do I transfer my plan to the Commonwealth Plan?

Call 1-877-MA-ENROLL for assistance. Be sure to have the Commonwealth of Massachusetts’ Employer ID # 149683 on hand.

Rules Regarding Payments/Delinquency

·         Each employee’s department receives enrollment information and deducts premium.

·         The Commonwealth makes payment through deductions taken from employee paychecks. The Commonwealth is not responsible for any premium shortfall.

·         Accounts are considered delinquent when a partial premium payment, or no payment, is received prior to the first day of the coverage month.

·         Payment can be received up to four business days prior to the first day of coverage month.

·         If an account is delinquent for 60 days from the first day of the coverage month in which payment is due, coverage will be terminated.

·         Re-instatement of lapsed coverage is allowed twice per plan year as long as all back premiums and reinstatement fees are paid by the subscriber and coverage has not lapsed for longer than 90 days.

·         There are no late fees.

 

 
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