May 18, 2007

Update on state health care reform

With the new Massachusetts Health Care Reform Act set to take effect July 1, all state residents age 18 years old and over will be required to have health insurance coverage. Because residents without coverage after this date can face serious consequences — including the loss of their state income exemption tax for 2007 and additional financial penalties in 2008 — the MGH is helping educate employees about the new law. Below is a list of important considerations regarding the Health Care Reform Act.

MGH employees can obtain coverage through the hospital, if eligible, or through an outside source such as a spouse's employer. Employees who qualify for insurance through the hospital but do not currently have coverage can call the Benefits Office at (617) 726-8133. The state has established the Commonwealth Health Insurance Connector to provide health insurance to residents who do not have coverage through their employers or an outside source. If employees do not qualify for an employer-sponsored health insurance plan, they may want to enroll through a state plan. Information on state-funded insurance and private health insurance plans is available at www.mahealthconnector.org.

The act extends coverage for dependents ages 19 through 26 years old. Under the new law, a dependent who loses health coverage due to age (19 years old and over) or loss of full-time student status can continue coverage for up to two years once he or she can no longer be claimed as a tax dependent. All coverage will end the day before the dependent's 26th birthday, even if this is earlier than two years following loss of student eligibility or tax dependency. An employee must be enrolled in an MGH medical, dental and/or vision plan to enroll his or her child. Once an employee's dependent loses MGH group coverage, he or she is eligible for an additional 36 months of coverage under COBRA at a full premium cost. All dependents lose coverage if they marry, even if under age 26.

There is no additional payroll deduction for employees to add a dependent child to their health plan if the employee already has MGH medical coverage. However, if the child is no longer a tax dependent and the employee provides less than half of the child's support, the cost of adding or continuing the child as an individual medical plan member will be included in the employee's income for tax purposes per federal rules. Employees should consult a financial advisor for assistance in understanding how this can affect their taxes.

The new law does not change health coverage for disabled dependents. Unmarried, dependent handicapped children over age 25 still qualify for MGH medical, dental and/or vision insurance if coverage has been continuous since before age 19. For more information about the act, enrolling in MGH-sponsored health insurance or coverage for dependents, contact the Benefits Office at (617) 726-8133 or ibenefits@partners.org. Patients who have questions about the law or need assistance enrolling in insurance can call MGH Patient Financial Services at (617) 726-2191.