By Glen Johnson, AP Political Writer | October 31, 2005
BOSTON --Massachusetts companies employing more than 10 people would face a new payroll tax that they could avoid only by providing health insurance, according to a House bill unveiled Monday.
The measure, which aims to cover 95 percent of the state's roughly 500,000 uninsured residents within three years, would tax companies with fewer than 100 employees at 4 percent of their payroll. Those with more than 100 or more workers would be taxed at 6 percent.
The tax would be reduced or nullified if the companies provided a health care plan, said Rep. Patricia Walrath, co-chairman of a legislative committee that discussed the proposal.
Employees, meanwhile, would be required to take advantage of the company health care plan, under a measure similar to the state law requiring drivers to get auto insurance before registering their automobile.
The tax revenues raised from employers who don't insure their own workers will be pooled so the state can provide subsidized coverage instead, according to the House bill.
Under current law, companies providing health insurance also pay a surcharge used to provide coverage to the uninsured. Companies that do not provide insurance do not have to pay the surcharge.
A chart Walrath, D-Stow, displayed after the committee hearing showed a family of four with an annual income of $48,500 paying $161 per month for subsidized coverage from the Commonwealth Care Health Insurance Program. A single adult earning $24,000 per year would pay $80 per month.
The legislation does not call for any increase in liquor or cigarette taxes, as had been previously discussed.
The program's estimated cost would be $25 million this year, $150 million in the first full year, $188 million in the second year, and $225 million when reaching full implementation in the third year.
Business leaders have opposed mandated coverage, saying it could impede job growth by increasing benefit costs.
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