2006 Massachusetts Code - Chapter 151A — Section 14G. Unemployment health insurance contribution; medical security contribution.

Section 14G. (a) Beginning on January 1, 1990, each employer, except those employers who employ five or fewer employees, subject to the provisions of sections 14, 14A and 14C, shall pay, in the same manner and at the same times as the deputy director of employment and training prescribes for the contribution required by said section 14, an unemployment health insurance contribution computed by multiplying the wages paid its employees by the unemployment health insurance contribution rate of.12 of 1 per cent.

(b) Such unemployment health insurance contribution shall be paid to the deputy director of employment and training in accordance with the procedures prescribed by said deputy director. The receipts from such contributions shall not be deposited in the State Unemployment Compensation Fund but shall be impressed with a trust and dedicated, through the state treasurer as trustee, to the unemployment health insurance contribution account of the Medical Security Trust Fund, established in subsection (k), but $1 annually for each employee whose wages determine each employer’s total unemployment health insurance contribution shall be deposited in the Catastrophic Illness in Children Relief Fund established by section 2ZZ of chapter 29. Prior to the depositing of the receipts, the deputy director of employment and training may deduct all administrative costs incurred by the division of employment and training as a result of this section, including an amount as determined by the United States Secretary of Labor in accordance with federal cost rules but in no calendar year may such deduction exceed 5 per cent of the amounts collected pursuant to this section.

(c)(1) For the purposes of this section, the term “wages” shall not include that part of remuneration which, after remuneration equal to the unemployment health insurance contribution wage base with respect to employment with such employer has been paid to an individual during the calendar year, is paid to such individual during such year. For the purposes of this paragraph, remuneration shall include remuneration paid to an individual during the calendar year with respect to employment with a transferring employer, as that term is used in subsection (n) of section 14.

(2) For the purposes of this section, the term “unemployment health insurance contribution wage base” shall equal $14,000 for the calendar years 1990 to 1992, inclusive. For each subsequent calendar year, the unemployment health insurance contribution wage base shall equal the product of (i) the unemployment health insurance contribution wage base for the then previous calendar year; and (ii) the sum of one and the health insurance inflation rate for the then previous calendar year as reported by the rate review board established pursuant to subsection (f).

(d)(1) The provisions of this section shall not apply to an employer newly subject to this chapter, as defined in paragraphs (2) and (3) of subsection (i) of section 14, until such employer has been an employer for not less than the 12 consecutive months’ period specified in paragraph (1) of subsection (b) of said section 14.

(2) During the first calendar year in which this section shall apply to an employer newly subject to this chapter pursuant to paragraph (1), such employer’s unemployment health insurance contribution shall be computed by substituting in subsection (a) the words “.04 of 1 per cent” for the words “.12 of 1 per cent”.

(3) During the second calendar year in which this section shall apply to an employer newly subject to this chapter pursuant to paragraph (1), such employer’s unemployment health insurance contribution shall be computed by substituting in subsection (a) the words “.08 of 1 per cent” for the words “.12 of 1 per cent”.

(e) Except where inconsistent with the provisions of this section, the terms and conditions of this chapter which are applicable to the payment and collection of contributions or payments in lieu of contributions shall apply to the same extent to the payment of and the collection of such unemployment health insurance contribution; provided, however, that such contributions shall not be credited to the employer’s account or to the solvency account established pursuant to section 14, 14A or 14C.

(f) There shall be a rate review board composed of the commissioner of medical assistance or his designee, the deputy director of employment and training or his designee and the commissioner of insurance or his designee. The rate review board shall determine if the unemployment health insurance contribution rate and the unemployment health insurance contribution wage base established in this section shall be adequate to provide for the estimated costs for the subsequent year of unemployment health insurance programs established pursuant to subsection (j) provided by said division of employment and training. If in the opinion of said board the unemployment health insurance contribution wage base or the unemployment health insurance contribution rate as established above would be inadequate to properly fund the unemployment health insurance program, said rate of health insurance inflation or the unemployment health insurance contribution rate shall be appropriately adjusted in order to properly fund said unemployment health insurance program.

On or before November 30 of each year, the deputy director of employment and training shall certify to said board the estimated costs for the subsequent year of health insurance programs provided by the division of employment and training for individuals and their families who are eligible for the health insurance program established by subsection (j) for individuals receiving unemployment insurance compensation. Such estimated costs shall be exclusive of amounts to be covered by premiums, co-payments, deductibles and co-insurance to be paid by covered individuals and any anticipated appropriations. The rate review board shall further adjust such estimated costs to reflect prudent levels of reserves sufficient to carry out the responsibilities of the division of employment and training for said unemployment health insurance program. If in the opinion of said board the rate of health insurance inflation on the unemployment health insurance contribution wage base as established or calculated above would be inadequate to properly fund said unemployment health insurance program, said rate of health insurance inflation or the unemployment health insurance contribution rate shall be appropriately adjusted in order to properly fund said health insurance programs.

(g) Any employer who fails to file any report or form as required by this section shall pay a penalty equal to 10 per cent of the contribution due under this section; provided, however, that the penalty assessed shall not exceed $100 nor shall it be less than $25 for each such failure to file in addition to restitution for any amounts owed to the Medical Security Trust Fund as a result of such failure to make a correct contribution. Any penalties collected pursuant to this section shall be deposited in the Medical Security Trust Fund. Any employer, in accordance with rules and regulations promulgated by the deputy director of employment and training, who relies in good faith on statements by employees relative to their health insurance status shall not be liable for any penalty or restitution for failure to comply with the provisions of this section caused by misstatements of such employees. Any contribution under this section shall be allowable as a business expense.

(h) Any employer notified of a determination of the deputy director of employment and training, that such determination is subject to the provisions of this section, may request a hearing on such determination. The request for hearing shall be filed within ten days after mailing of the notice of the determination. If a hearing is requested, said deputy director shall give the employer a reasonable opportunity for a fair hearing before an impartial hearing officer designated by the deputy director. The conduct of such hearing shall be in accordance with the procedures prescribed by subsection (b) of section 39. Any employer aggrieved by the decision following such hearing may appeal such decision. Such appeal shall be in accordance with the procedures prescribed by sections 40 to 42, inclusive. Unless action is taken under section 40, the decision of said deputy director shall be final on all questions of fact and law.

(i) The division of employment and training shall provide written information to each individual who is eligible for unemployment benefits, including extended benefits under section 30A or extended unemployment compensation benefits under the federal Emergency Unemployment Compensation Act of 1991 or any other federal act, that such individual may be eligible for health insurance coverage pursuant to this section and the provisions of subsection (j). In addition, the division of employment and training shall post in its local offices a clear and conspicuous notice advising individuals of their rights under this section; provided, however, that such notice shall be in English and Spanish and such other language which said division determines appropriate for the area office in which the notice is posted.

(j) The division of employment and training shall establish and may operate a health insurance program for the benefit of persons who meet both of the following criteria: (1) the person is receiving or is eligible to receive unemployment compensation benefits under this chapter, including extended benefits under the provisions of section 30A or extended unemployment compensation benefits, hereinafter referred to as EUC benefits, under the federal Emergency Unemployment Compensation Act of 1991 or any other federal act; and (2) the gross income of such person and such person’s spouse, if any, including any income received from unemployment benefits, extended benefits or EUC benefits as provided in clause (1), is less than or equal to four times the nonfarm poverty guidelines of the United States Office of Management and Budget.

The health insurance program administered by the division of employment and training shall consist of the following options: a buy-in option called the continuation plan under which said division shall subsidize a qualified person’s continued enrollment in the health insurance plan to which they belonged at the time of, or prior to, applying for unemployment compensation benefits, including persons whose continued eligibility for such enrollment is based on the federal COBRA law, so-called, and an option called the direct coverage plan which shall consist of a limited plan of health care services and benefits to be administered by said division. To qualify for benefits under this section, said division shall require that applicants maintain continued enrollment in the health insurance plan in which they were enrolled prior to applying for unemployment compensation benefits or as permitted by the federal COBRA law.

Persons so qualified shall be ineligible for enrollment in the direct coverage plan and the division of employment and training shall subsidize enrollees’ continued health insurance plan by reimbursing such enrollees for a portion of their premium cost in accordance with the division’s benefits schedule. Persons unable to qualify for COBRA benefits, so-called, due to lack of access to prior health insurance coverage through their former employer or their spouse’s employer or a hardship determined by said division, shall be eligible for the direct coverage plan pursuant to the eligibility requirements of this section. Said division shall establish a schedule of co-payments and deductibles within the direct coverage plan which shall promote the cost-effective use of services by participants in the program.

The division of employment and training shall establish procedures for the calculation of the gross income of an applicant or the applicant’s spouse, if any, for the purposes of determining eligibility under a health insurance plan established under this section. Such procedures shall provide that in determining the income of the applicant or the applicant’s spouse, if any, said division shall examine the gross income of the applicant and the applicant’s spouse, if any, in the six months prior to application and a projection of the gross income of the applicant and the applicant’s spouse, if any, including a calculation of the maximum benefits payable to the applicant and the applicant’s spouse, if any, from unemployment benefits, extended benefits or EUC benefits for the six months after application. Such procedures shall also make provisions for the redetermination of eligibility for an enrollee or the enrollee’s family.

The division of employment and training shall establish grievance procedures under which any decision, action or inaction of said division which directly affects an enrollee or the enrollee’s family and is related to the receipt of benefits under this section may be revived. Said division shall establish appeal procedures under which an applicant may appeal a denial of benefits in whole or in part or may appeal a determination of income or under which an enrollee may appeal termination from the program.

For the purposes of this section the term “family members” of the applicant or enrollee shall include the applicant or enrollee, a spouse and any legal dependents.

The division of employment and training shall prepare reports on the status of the program established in this section and shall submit such reports on the first Wednesday in January, April, July and October of each year to the joint committee on health care and the house and senate committees on ways and means. Such reports shall include, but not be limited to, the number of enrollees in the program for the previous quarter, the amount of benefits paid out in the previous quarter and the end of quarter balance in the Medical Security Trust Fund established in subsection (k). The deputy director of employment and training is hereby authorized to delegate, by means of an interagency service agreement, to another state agency the authority to manage and administer the health insurance program established by this subsection.

(k) There is hereby established a Medical Security Trust Fund which shall be administered and expended by the division of employment and training without further appropriation. Said trust fund shall consist of employer unemployment health insurance contributions required by subsection (a) and premiums paid by enrollees. Said fund shall be used exclusively for the payment of premiums for health insurance plans provided to persons receiving unemployment compensation, except that $1 annually for each employee whose wages determine each employer’s total unemployment health insurance contribution shall be deposited in the Catastrophic Illness in Children Relief Fund established by section 2ZZ of chapter 29. The $1 contribution shall be made after the Medical Security Trust Fund has met its obligations. The deputy director shall report annually to the governor and the senate and house committees on ways and means. The report shall include information about the number of participants in the Medical Security Trust Fund, along with an estimate of amounts necessary to meet the current obligations of the department and the obligations for a reasonable future period. The deputy director shall also make recommendations for changes in the law and regulations governing the fund. For the purpose of accommodating discrepancies between the receipt of revenues and related expenditures, the division may incur obligations and the comptroller may certify payment amounts not to exceed the most recent revenue estimate submitted by the division and approved by the comptroller; provided, however, that the fund shall be in balance by the close of each fiscal year.