With healthcare reform near the top of the new administration’s to-do list, some are looking at Massachusetts’s mandatory health insurance law as a model for national consideration. Whether their initiative has been successful or cost-effective is a topic for another day. But if a similar plan is considered nationwide, federal lawmakers should be aware of loopholes that exist in Massachusetts law that are giving employers too much wiggle room in their obligation to provide health insurance to workers.
Under that state’s law, businesses of 25 or more employees are required to offer insurance to employees, but exactly what constitutes an acceptable insurance plan is not well-defined. One murky requirement of the plans is prescription drug coverage; all plans must include the coverage, but whether plans could impose limits on those prescription drug benefits was not written included in the law. Thus, some companies have provided insurance that puts a cap on annual prescription coverage, which is contrary to the intent of the state’s healthcare reform effort.
Another shortcoming is maternity care for dependents of a plan’s subscriber, which a number of companies’ plans do not include. Again, without precise enough definitions in the law, employers are able to get around providing coverage in a way that the legislators originally intended. Even more problematic is the fact that employees, and not employers, are responsible for making sure their coverage is adequate in the eyes of the law. So if a company’s plan is deemed insufficient by the state, the employee will either have to purchase another plan or be hit with a $1,000 tax penalty. Overall, federal legislators should be aware of loopholes like these if they ever consider a similar law.
