Overview of State Approaches to Section 125 Policies Designed to Expand Coverage
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Policy
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State
(Effective Date)
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Applicable Firm Size/Type
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Section 125 Requirement
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Connecticut (October 2007)
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Connecticut employers of all sizes that (a) offer fully insured health coverage and (b) require an employee contribution to that coverage
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Such employers are required to establish a Section 125 plan.
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Indiana (January 2008)
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All Indiana employers that do not currently offer health coverage or a Section 125 plan
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Created a tax credit to encourage employers to establish a fully insured health plan in conjunction with a Section 125 plan. The tax credit is equal to the lesser of $50 per employee or $2,500 for two years if the employer offers such a plan.
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Maryland (September 2008)
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Non-offering Maryland firms with 2 to 9 full-time employees participating in Maryland’s new subsidized coverage initiative
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To qualify for a premium subsidy, the employer must establish a Section 125 premium conversion plan.
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Massachusetts (October 2007)
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Massachusetts employers of 11 or more employees
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Such employers must (a) maintain a Section 125 plan, (b) enable employees to pay for their coverage (either through their employer or through the Connector) on a pre-tax basis, and (c) file a copy of the Section 125 plan document with the Connector.
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Minnesota
(July 2009)
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Minnesota employers that do not offer health insurance
with more than 10 employees
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Such employers are required to establish a Section 125 plan. This proposal does not require employers to offer health insurance coverage or contribute to it and includes an opt out provision.
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Missouri
(to be
determined)
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Missouri firms offering fully-insured coverage with an
employer contribution
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Such employers are required to establish a Section 125 plan.
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Rhode Island
(July 2009)
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Rhode Island employers of 25 or more employees
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Such employers are required to establish a Section
125 plan. The legislation does not require companies to contribute to their employees’ insurance or to offer workers the chance to buy insurance at a group rate.
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Sources are:
http://www.cga.ct.gov/2007/rpt/2007-R-0690.htm; http://www.statecoverage.net/programs-indiana.htm; http://mhcc.maryland.gov/partnership/about.aspx;
http://www.mahealthconnector.org/portal/site/connector/; https://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=ccrsf3780.html&... http://
www.house.mo.gov/billtracking/bills071/billpdf/truly/HB0818T.PDF; http://www.rilin.state.ri.us/billtext07/senatetext07/s0448b.pdf
SCI would like to thank Lynn Quincy, Mathematica Policy Research, Inc., for her contributions to this table.
