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Governor Patrick filed legislation that will lower business costs and encourage job growth by freezing unemployment insurance rates for employers and reducing or eliminating the contributions they make to fund health care programs for low-income residents.

“This common sense legislation is good for businesses and good for the Commonwealth,” said Governor Patrick. “Our people need jobs and these further measures will help employers create those jobs.”

“We want all businesses to succeed in Massachusetts, and this legislation proposes resources that will provide relief and a supportive business climate for companies across the state,” said Lieutenant Governor Timothy Murray.

Key Elements of the Legislation:

Freeze the UI Contribution Rate

  • Freezing the employer Unemployment Insurance (UI) contribution for 2013 will save employers an estimated $500 million. This marks the fourth year in a row the Governor has advocated for freezing the UI rate in order to provide economic relief to employers. If passed, the Patrick-Murray Administration will have saved employers approximately $1.7 billion over the last four years alone. Even with the freeze, the Unemployment Insurance Trust Fund balance will end 2013 with approximately $600 million dollars.

 Eliminate the Fair Share Contribution Program and Medical Security Program

  • Effective June 30, 2013, the legislation will eliminate the Fair Share Contribution Program. The Fair Share Contribution program was established under the Commonwealth’s 2006 health care reform law and mandates that employers with 11 or more full-time equivalent employees make a “fair and reasonable” contribution toward the health care costs of its full-time workers, or pay a $295 per employee. The federal Affordable Care Act has a similar policy for employers with over 50 employees, effective in 2014, that could result in double-penalties if the two policies were to coexist.
  •  Eliminate the Medical Security Program by the end of this calendar year. MSP provides qualifying individuals receiving unemployment insurance benefits health care coverage.  Like the Fair Share Program, MSP will no longer be necessary under the ACA.
    • Through the ACA, individuals currently enrolled under MSP will be able to access subsidized health coverage through our existing state insurance programs like MassHealth and those offered at the Health Connector.

Continue to Maintain Quality Health Care, Employer Contribution

  • In order to ensure employers are contributing their share to maintain quality, affordable health care for all residents, the legislation creates an “employer responsibility contribution” for employers which will, starting in 2014, help finance the cost of subsidized care for low-income residents.
    • Unlike previous programs, the employer responsibility contribution will be streamlined, efficient and less burdensome for both small and large businesses.
    • This contribution will be lower than the current employer assessment funding level for the Medical Security Program.

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