| A second Cabinet secretary said Tuesday that the administration is willing to back away from Gov. Charlie Baker’s controversial proposal to impose a $2,000 per employee assessment on companies that don’t meet certain health insurance requirements.
In response to the only questioning she received on the proposal at Tuesday’s Ways and Means Committee budget hearing, Health and Human Services Secretary Marylou Sudders said Massachusetts needs to wrestle with MassHealth spending, but that the administration is open to an alternative to the assessment.
“The administration has been very open to if not this, then what?” Sudders said. “A budget proposal is the opening and we clearly changed the conversation and we have been wanting to hear what other options could be available … so we’ve been very open to that.”
Baker’s proposal, filed in January along with his fiscal year 2018 budget plan, would impose a $2,000 per employee assessment on companies with 11 or more employees that don’t offer health coverage or that do not insure at least 80 percent of their full-time employees. It was met with almost immediate opposition from business organizations, who says the significant charge could hit employers whose workers are opting not to take their insurance offerings.
The assessment represents an important new revenue source for Baker, who largely opposes new or increased taxes, and its consideration comes in the midst of debate over Congressional plans to replace the Affordable Care Act. The successor plan could pull substantial federal revenues out of Massachusetts.
In a letter to members of the Massachusetts Congressional delegation Tuesday, Baker estimated the American Health Care Act sponsored by Republican leaders would result in $1 billion less in federal revenue for Massachusetts in 2020, $1.3 billion less in 2021 and $1.5 billion in 2022, “with likely a greater annual impact in the years that follow.” In addition, Baker said up to $475 million in federal support for a health care waiver his administration negotiated with the Obama administration appears at risk under the federal bill, which faces crucial votes this week in Washington, D.C.
Sudders said that 70 percent of Massachusetts employers with fewer than 11 employees do not offer coverage, 25 percent of employers who employ between 11 and 50 workers do not offer coverage, and 6 percent of employers with more than 51 employees don’t offer coverage.
The administration has been “meeting with the business community about alternatives to the employer contribution,” she said.
Earlier this month, Administration and Finance Secretary Kristen Lepore said, “If someone else has a better idea on how to accomplish this then, yes, we are open to other ideas.” She also indicated the administration would meet with business representatives to discuss an alternative.
