On April 12, 2006, Massachusetts Governor Mitt Romney signed a health care bill, known as "An Act Providing Access to Affordable, Quality, Accountable Health Care (the "Act")", into law. The Act became effective on July 1, 2007, making Massachusetts the first state in the country to mandate health insurance coverage.
Under the Act’s "individual mandate," all Massachusetts residents must have health insurance. Residents must indicate on their tax forms for the 2007 tax year if they had insurance on December 31, 2007, have a waiver for religious reasons, or have a waiver from the Commonwealth Health Insurance Connector Authority (the "Connector")*, an independent public authority. Individuals without coverage or a waiver will have to pay penalties to the Department of Revenue. Penalties will begin with a loss of individuals’ personal tax exemption for the 2007 tax year and will increase to a portion of what they would have paid toward health insurance premiums for subsequent violations.
The Act also establishes new requirements for Massachusetts employers with 11 or more employees. Such employers who do not provide health insurance coverage to their employees may contribute about $295 per full-time employee per year to the cost of coverage or may adopt a plan that allows their employees to purchase health insurance with pre-tax dollars. If employers with 11 or more employees do not offer to contribute toward or arrange for the purchase of health insurance, they may be assessed a "free rider surcharge."
The Act is a landmark piece of legislation and has both critics and proponents. Critics question whether these programs will succeed and wonder how costs will be controlled, and proponents are optimistic that other states will adapt similar mandates.
*The Connector was created for and is tasked with the implementation of significant portions of the Act by assisting qualified uninsured residents with the purchase of affordable health care. The Connector administers two separate programs to help uninsureds obtain health insurance: Commonwealth Care and Commonwealth Choice. Commonwealth Care is a state-subsidized program for individuals whose annual incomes are at or below 300% of the Federal Poverty Level ("FPL"). Premiums for the program are set on a sliding scale based on household income, and some of the plans offered through will not have a deductible. Commonwealth Choice is a commercial insurance program available to those whose income exceed 300% of the FPL and provides access to high quality, affordable health plans offered through Blue Cross Blue Shield, Fallon Community Healthcare, Neighborhood Health Plan, Tufts Health Plan and Harvard Pilgrim Health Care to uninsured individuals and small businesses.