Code of Massachusetts Regulations
956 CMR - COMMONWEALTH HEALTH INSURANCE CONNECTOR AUTHORITY
Title 956 CMR 11.00 - Employer Fair Share Contribution
Section 11.03 - Determination of Fair and Reasonable Premium Contribution

Universal Citation: 956 MA Code of Regs 956.11

Current through Register 1531, September 27, 2024

(1) General. An Employer that employs 11 or more full-time equivalent Employees in the Commonwealth as determined under 956 CMR 11.03(2) and is not a Contributing Employer as determined under 956 CMR 11.03(3) shall pay a per Employee contribution in accordance with 430 CMR 15.00: Fair Share Employer Contribution.

(2) Number of Employees. An Employer has 11 or more full-time equivalent Employees if the sum of total payroll hours for all Employees for a calendar quarter, divided by 500, is greater than or equal to 11. In calculating total payroll hours:

(a) For each Employee with more than 500 payroll hours, the Employer shall include 500 payroll hours.

(b) Payroll hours include all hours for which an Employer paid wages to an Employee including, but not limited to, regular, vacation, sick, Federal Medical Leave of Absence, short term disability, long term disability, overtime and holiday payroll hours.

(c) An Employer that is determined to be a successor under M.G.L. c. 151A shall include the payroll hours of the predecessor's Employees during the applicable period.

(d) Payroll hours include hours for which an Employer paid wages to a temporary employee as defined in 430 CMR 4.04(8)(a): Definitions provided that the individual has worked for the Employer for at least 150 payroll hours during the 12 month period ending with the last day of the applicable reporting period.

(3) Contributing Employer Determination. A Contributing Employer that makes a Fair and Reasonable Premium Contribution to a Group Health Plan in accordance with 956 CMR 11.03(3) is not liable for the Fair Share Contribution.

(a) Group Health Plan. A Contributing Employer must maintain documentation about its group health plan and premium contributions including, but not limited to, the following:
1. a written plan description for each plan, including a description of benefits; eligibility requirements, and amount of employer contribution; and evidence that the plan was in place during the quarter for which eligibility is determined; and

2. copies of employee handbook or other written communications to employees about the plan or plans, including plan benefits, eligibility requirements, and the employer contributions.

3. A Premium Reimbursement Arrangement may be considered a Group Health Plan for purposes of 956 CMR 11.00 only if the Employer designates a specific insurance plan or plans for employee enrollment, in writing; communicates such designation, in writing, to its employees; and otherwise meets the criteria enumerated in 956 CMR 11.03(3)(a)1. and 2.

(b) Employees. For purposes of determining if an Employer is a Contributing Employer, an Employer shall:
1. include all Full-time Employees employed at Massachusetts locations, whether or not they are Massachusetts residents; and

2. exclude Seasonal Employees and temporary employees. A temporary employee is an employee that works for an Employer on either a full or part-time basis whose employment is explicitly temporary in nature and does not exceed 12 consecutive weeks during the 12-month period ending on the last day of the reporting quarter.

(c) Percentage of Full-time Employees Enrolled.
1. An Employer shall calculate the percentage of Full-time Employees enrolled in its Group Health Plan for each quarter as follows:
a. The Employer shall identify and record the number of Full-time Employees enrolled in the Group Health Plan on the last day of the calendar quarter.

b. The Employer shall identify and record the number of Full-time Employees on the Employer's payroll on the last day of the calendar quarter.

c. The Employer shall calculate the percentage of Full-time Employees enrolled for the quarter by dividing the number of Full-time Employees enrolled in the Group Health Plan for the quarter by the number of Full-time Employees for the quarter.

2. Employees included in the percentage calculation. An Employer must include all Full-time Employees as defined in 956 CMR 11.02 to determine its Percentage of Full-time Employees Enrolled.
a. Multi-employer Health Plans. If the Employer makes premium contribution payments to a Multi-employer Health Plan on behalf of an Employee, the Employer may include that Employee in the calculation of the percentage of Full-time Employees enrolled in its group health plan.

b. Federal Contracts. An Employer that makes an employee benefit contribution for a Full-time Employee in accordance with federal requirements, the Employer may include that employee in the number of employees enrolled in the health plan.

c. Prevailing Wage. An Employer that makes an employee benefit contribution to a health and welfare plan for a Full-time Employee in accordance with M.G.L c. 149, § 27 may include that Employee in the number of Employees enrolled in the health plan.

d. Exempt Employees. An Employer may exclude a Full-time Employee from the denominator of the percentage of Full-time Employees enrolled if the employee claims exemption from the requirements of M.G.L. c. 111M, § 2 because of sincerely held religious beliefs and has filed an affidavit in accordance with M.G.L. c. 111M, § 3. The Employer must maintain documentation to verify that the employee has claimed such an exemption.

(d) Premium Contribution Standard. For purposes of the Premium Contribution Standard, an Employer must offer to make a premium contribution of at least 33% of the cost of an employer sponsored Group Health Plan offered to all of its Full-time Employees no more than ninety days after the date of hire.
1. An Employer's Group Health Plan must be in effect and available to Full-time Employees for the entire quarter. If a new Employer or its predecessor is not in operation on the first day of the quarter, the Employer is not liable for the Fair Share Contribution during that quarter.

2. For each quarter, the premium contribution percentage, the offer to employees, and the minimum number of hours that the Employer requires for an employee to be eligible for full time benefits must be documented in writing.

3. An Employer that contributes to an employer-sponsored Group Health Plan and also contributes to a Multi-employer Group Health Plan, including a Taft-Hartley Plan, or makes employee benefit contributions pursuant to federal contract requirements or M.G.L. c. 149, § 27, shall determine its compliance with the premium contribution standard based only on its employees enrolled in its Group Health Plan.

4. If an Employer makes different percentage contributions for different employee groups, compliance with the premium contribution standard is based on the lowest premium percentage contribution.

(e) Contributing Employer Determination. An Employer is determined to be a Contributing Employer based on the percentage of Full-time Employees enrolled in its Group Health Plan under 956 CMR 11.03(3)(e); its compliance with the premium contribution standard under 956 CMR 11.03(3)(e); and the number of full-time equivalent employees calculated under 956 CMR 11.03(2).
1. An Employer is a Contributing Employer if:
a. for an Employer with more than 50 full-time equivalent employees:
i. its percentage of Full-time Employees enrolled is at least 25% and it meets the premium contribution standard; or

ii. its percentage of Full-time Employees enrolled is at least 75%.

b. for an Employer with 50 or fewer full-time equivalent employees, if:
i. its percentage of Full-time Employees enrolled is at least 25%; or

ii. it meets the Premium Contribution standard.

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