Massachusetts is close to getting a law that would ban new health benefits mandates until 2008 but require employers with more than 10 workers to provide health coverage or pay a $295-per-worker tax.

Members of the Massachusetts House voted 154-2 Tuesday to approve a universal health insurance bill, H.B. 4850, and members of the Senate passed the bill 37-0.

H.B. 4850 is a conference report, or compromise bill, that combines provisions of House Bill 4479 with Senate Bill 2282.

Lawmakers must vote on the conference report one more time before it can go to Gov. Mitt Romney for his signature.

Romney, a Republican who has been heralded as a possible 2008 presidential candidate, led efforts to develop universal health insurance legislation, and he has said that he will sign the bill.

Opponents of benefits mandates have blocked implementation of other, earlier universal health insurance laws in other states in court, by arguing that the laws violated the Employee Retirement Income Security Act.

One general bill provision would combine the Massachusetts small-group and non-group markets in July 2007, in an effort to reduce rates for individuals. Another general provision would give health maintenance organizations the ability to offer high-deductible health plans that are compatible with the health savings account program.

Here is a description of some of the other provisions of H.B. 4850.

Individual Residents

The bill would:

- Create an agency, the Commonwealth Health Insurance Connector, that would help individuals who have no employer-sponsored coverage buy affordable coverage.

- Provide free health coverage for uninsured residents, including childless residents, who have incomes below the federal poverty level. (Today, childless individuals have a difficult time qualifying for Medicaid or other public health coverage programs, even if their incomes are very low, according to a summary of the H.B. 4850 conference report posted on the Web site of the Massachusetts legislature.)

- Require most uninsured individuals with incomes between the federal poverty level, or about $9,600 for an individual, and 3 times the federal poverty level to pay for subsidized private coverage by July 1, 2007.

- Require most uninsured individuals with incomes over 3 times the federal poverty level, or about $38,500 for a family of 2, to buy private health coverage by July 1, 2007.

- Take state income tax personal exemptions for tax year 2007 away from individuals with incomes over the federal poverty level who fail to buy health coverage.

- Create exceptions to the health insurance purchase requirements for individuals if affordable policies are not available.

- Use federal Medicaid funding to pay for health coverage for uninsured individuals rather than for direct payments to hospitals.

Young Adults

The bill would:

- Let young adults stay on their parents’ insurance plans for 2 years past the loss of their dependent status, or until they turn 25, whichever occurs first.

- Create affordable, specially designed products for young adults ages 19 to 26.

Employers

Massachusetts would:

- Require employers with more than 10 employees that fail to provide health coverage to pay a $295 “fair share contribution” to the state for each uninsured employee. The state will let employers pro-rate fair share contribution requirements for seasonal and part-time employees.

- Require employers with more than 10 employees and no employer-sponsored health coverage to let employees cut their taxes by purchasing coverage through Section 125 plans.

- Impose a “free rider” surcharge on companies that fail to provide health insurance and whose employees use free care. If Massachusetts implements H.B. 4850 as written, the state could impose the free rider surcharge when 5 or more employees of a company with more than 10 employees received free care in a year. “The surcharge will range from 10% to 100% of the state’s costs of services provided to the employees, with the first $50,000 per employer exempted,” according to the conference report summary.

Links to the conference report, the summary of the report and related documents are now in the bottom left-hand corner of the Massachusetts legislature home page, at Document Link