Massachusetts has been given an additional year to transition to a new system under the Affordable Care Act that would change the way insurance carriers calculate premiums for Massachusetts businesses and potentially drive up the cost for many employers, according to a report by the State House News Service.
Outgoing Health and Human Services Secretary Kathleen Sebelius granted the additional year to complete the transition to new premium rating factors on Thursday, April 24 after previous requests from the governor for a complete waiver were not granted. The extension should help smooth the impact on business owners, Insurance Commissioner Joseph Murphy said. The allowed rating factors under the Affordable Care Act are age, geography, family size and tobacco use, but in Massachusetts carriers had been allowed to consider five additional factors, including industry, group size, participation rate, use of intermediary and membership in a group purchasing cooperative.
Governor Patrick twice requested a waiver from the new rating rules, first verbally and then in writing at the behest of the Legislature, but was denied both times. Massachusetts had been allowed a three-year window to phase out its own rating factors, but now under the new ruling from HHS that transition period has been extended to 2017. “I thank the Obama Administration for affording us this flexibility that will help our small businesses more smoothly transition into compliance with the Affordable Care Act,” Mr. Patrick said in a statement. “The Commonwealth remains a national leader in health care coverage for our residents and we will continue working closely with our partners at the federal level to ensure the ACA is successfully implemented in Massachusetts.”
Patrick administration officials have estimated that 53 percent of subscribers in the small group and individual market in Massachusetts will see premium increases, while 47 percent will see decreases resulting from the rating changes. A spokeswoman for the Patrick administration could not be reached to explain what prompted the action from HHS.