Massachusetts Health Care law recently made public, with little fanfare, the
2008 version of the required Employee HIRD form. Employers should
immediately discontinue use of the 2007 version.
WHAT THIS MEANS TO YOU AS AN EMPLOYER
Massachusetts employers must get employees to complete a HIRD Form after
they decline coverage under (i) an employer's group health insurance plan, or (ii) a
Section 125 plan which permits employees to purchase health insurance on a
pre-tax basis.
The signature deadline is 30 days after the end of open enrollment periods for
such plans, or 30 days after a decline which did not occur during open enrollment.
Employers must keep the HIRD forms for three years and be ready to produce
them if audited. Employees are supposed to keep copies so that they can be
produced if their Massachusetts tax form is audited.
Failure to get a HIRD signed when an employee declines Section 125 plan
coverage can be evidence that the employer is not administering a Section 125
plan according to Massachusetts law. And that means possible assessment of free
care pool expenses if uninsured employees don't pay hospital bills.
Collecting Employee HIRD Forms is not a one-time process. At a minimum, the
forms must be collected annually from decliners after open enrollments. Also, new
employees who turn down coverage, and employees who drop coverage mid-year,
must complete forms.
The HIRD Form requirement only applies to employers which pay for at least
22,000 hours (the equivalent of 11 full-time employees) in the current 12 month
period from October 1- September 30. For this purpose, don't count more than
2,000 hours for any employee.
On the subject of whether an employer pays for 22,000 hours, related
employers generally do not have to be aggregated. The employing entity is
determined according to whether it has (or is supposed to have) a Division of
Unemployment (DUA) number. Employers are not determined on a controlled group
basis as they are for IRS qualified plans. Nor is "association in common purpose"
taken into account, unlike the rule for determining whether employers with
different DUA numbers must be aggregated to determine if they are required to
sponsor Section 125 plans. As mentioned above, the measuring period for the
Employee HIRD requirement is the current 12 months from October 1 through
September 30. That's different from the measuring period for the Section 125 plan
mandate. An employer must sponsor a Section 125 plan in a calendar year if it paid
for more than 22,000 hours in a preceding 12 month measurement period from
October 1 - September 30.
Positives About the New Form
The Employer is allowed to pre-populate the form with answers to three
straightforward questions: (i) did it offer health insurance to the employee, (ii) did
it offer a section 125 plan to the employee, and (iii) what is the dollar amount of
the least expensive health insurance (monthly employee's share) offered to the
employee?
The Employee then must answer three questions (i) did you accept employee
health insurance, (ii) did you agree to use the employer's section 125 plan to
purchase health insurance, and (iii) do you have other coverage?
Click here for a copy of the HIRD Form.
WANT TO LEARN MORE?
As your employee benefits and regulatory compliance partner, Corporate Synergies provides the necessary guidance and materials to assure adherence to both the letter and the spirit of state regulations. Should you require additional information about this HIRD form or how it relates to Employer Section 125, contact your CSG representative today. And, if you haven’t chosen CSG as your partner, are you certain you are in compliance? Please call Corporate Synergies at 1.866.CSG.1719 or click here to contact us today.
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