956 CMR 9.03 - Employers Subject to Surcharge

(1) General. An Employer is subject to surcharge if:

(a) it is a Non-providing Employer determined in accordance with 956 CMR 9.03(2); and

(b) any of its Employees are State funded Employees determined in accordance with 956 CMR 9.03(3); and

(c) its State funded Employees receive State funded Health Services that total at least $50,000 in a fiscal year as determined in accordance with 956 CMR 9.03(4).

(2) Non-providing Employer. A Non-providing Employer is an Employer of a State funded Employee as defined in 956 CMR 9.03(3) that employs eleven or more full time equivalent Employees and is not in compliance with the requirement to adopt and maintain a Section 125 Cafeteria Plan for such State funded Employee.

(a) Number of Employees. An Employer has eleven or more full time equivalent Employees if the sum of total payroll hours for all Employees for the Fiscal Year divided by 2,000 is greater than or equal to 11. In calculating total payroll hours:

1. For each Employee with more than 2,000 payroll hours for the Employer, the Employer shall include 2,000 payroll hours.

2. 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.

3. An Employer that is determined to be a successor under M.G.L. c. 151A shall include the payroll hours of the precessor's Employees during the applicable Fiscal Year.

(b) Certain Permitted Section 125 Cafeteria Plan Exclusions. An Employer is not a Non-providing Employer with respect to a State funded Employee to the extent the Employee is excluded from eligibility to participate in the Employer's Section 125 Cafeteria Plan in accordance with 956 CMR 4.00: Employer Sponsored Health Insurance Access.

(c) Exemptions. An Employer is not a Non-Providing Employer if it is a signatory to or obligated under a negotiated, bona fide collective bargaining agreement that governs the employment conditions of the State funded Employee; or participates in the Insurance Partnership Program.

(d) Employee Leasing Company Arrangements. If and to the extent there is an arrangement between Client Company and an Employee Leasing Company, the Client Company is the Employer for purposes of M.G.L. c. 118G and the determination of the Employer Surcharge under 956 CMR 9.00 with respect to itself and its Employees covered by the arrangement.

(3) State funded Employee. A State funded Employee is:

(a) an Employee or Dependent of such Employee with more than three State funded admissions or visits during a Fiscal Year, or

(b) an Employee or Dependent of an Employee of an Employer whose Employees or Dependents make five or more State funded admissions or visits during a Fiscal Year.

(4) Determination of State funded Health Costs. The Connector will determine the State funded Health Costs for a State funded Employee as follows:

(a) The Connector will review all claims for State funded Health Services submitted for payment by hospitals and community health centers during a Fiscal Year.

(b) The Connector will match claims to Employers, using all available data sources, including, but not limited to, the Employee's application form, the provider claim or Emergency Room Bad Debt Form, the HIRD form, Office of Medicaid data, and data from the Department of Revenue and Division of Unemployment Assistance.

(c) For each Fiscal Year, the Connector will determine State funded Health Costs by multiplying each provider's claims for State funded Health Services by its percentage of total Uncompensated Care Pool or Safety Net Care payments divided by its total charges for all State funded Health Services.

(d) The Connector will determine the Employers of State funded Employee(s) as set forth in 956 CMR 9.03(3) and with $50,000 or more in aggregate State funded Health Services.

(e) The Connector will determine if an Employer identified in 956 CMR 9.03(2) is a Non-providing Employer. The Connector will make this determination using data from the HIRD form, the Connector, and data matches undertaken pursuant to an Interagency Service Agreement to the extent permitted by law with the Department of Revenue and the Division of Unemployment Assistance.

(f) FY2007. For FY2007, the Connector will determine State funded Health Costs only for the period from July 1, 2007 through September 30, 2007.

(5) Monitoring. The Connector may use data submitted by hospitals and community health centers to monitor uncompensated care usage during the fiscal year and may inform Employers if it determines that its State funded Employees have incurred State funded Health Costs in a fiscal year.

Notes

956 CMR 9.03