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Business cries foul on health insurance

Swampscott’s Erin Calvo-Bacci’s business is focused on sweets. But the chocolate manufacturer has soured on increased health care costs imposed by the state.

“Employees get their paycheck and see how much they made and how much is taken out by the government,” Calvo-Bacci said. “What they don’t see is how much money is being put into the system by their employers which include payroll taxes, unemployment insurance, Medicare, and workman’s compensation, amongst many more things.”

Bacci operates her business, CB Stuffer, with six full-time employees but says she feels the strain as an increasing number of financial burdens are being placed upon owners, including additional health care costs imposed by a bill signed by the governor last week.
The bill signed by Gov. Charlie Baker imposes new fines and fees on business owners in the Bay State to offset increases in Medicaid and health care spending.

MassHealth, which offers insurance coverage for 1.9 million low-income and disabled residents, is budgeted for $15.6 billion in fiscal 2018. The program is expected to grow by $300 million in fiscal 2018. The new employer fees and penalties will cover about $200 million of that increase, according to a State House News Service report.

One assessment will boost a per-employee fee, known as the Employer Medical Assistance Contribution, from $51 to $77 per year for employers.
Another assessment will penalize employers with a fine of up to $750 per employee if their workers choose MassHealth even though they have access to affordable insurance through work.

Both assessments are scheduled to end in two years.

“Governor Baker signed this bill into law to advance the process of reforming MassHealth and to ensure the program can become financially sustainable. Now that the Legislature has made their intentions clear to take up additional reforms in the near future, the Baker-Polito Administration is going to take them at their word and continue discussing these critical reforms,” said Baker spokeswoman Lizzy Guyton. “The administration is ready and eager to learn what reforms the Legislature intends to develop and will work with lawmakers in both branches to bring down the cost of health care, ensure the MassHealth program is financially sustainable and continue to ensure nearly universal health coverage for the people of Massachusetts.”

Lynn Area Chamber of Commerce President and CEO, Leslie Gould, said employers are overburdened with taxes, fees, and fines. “The Lynn Area Chamber of Commerce doesn’t want to give businesses any reason to consider leaving the Commonwealth,” she said. She is hoping further discussions at the state level will follow to create a practical and pragmatic solution for MassHealth reform.

Businesses that already pay full-coverage health insurance for their employees, such as Wayne Alarm in Lynn, won’t be affected by the change.
“There has been a significant strain being put on employers that are already working them so tightly, however I do understand the importance of having a solid insurance provider for our employees,” Wayne Alarm president Ralph Sevinor said.

Leslie Greenberg, chair of the Lynn Health Task Force, said the fines are not fair.

“If you can’t afford insurance for your employees, you can’t afford to pay a fine after,” she said.

Back in Swampscott, Bacci, has decided to compensate for the loss by moving out of her brick and mortar location and sell exclusively online. She’s also purchased automated equipment, allowing her to decrease the amount of employees.

“Let’s say an employee makes $11 per hour. This isn’t how much the employer is actually paying after taxes and fees,” Bacci said. “Realistically, the employer could be looking at $24 an hour.”

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