Tax Implications For Your Coverage

Beginning January 1, 2009, Massachusetts will require residents 18 and older to have health care coverage that meets a new state standard for "minimum creditable coverage" (MCC).

MCC is a level of coverage that meets the basic requirements for health insurance coverage for Massachusetts residents, established by the Commonwealth Health Insurance Connector Authority (Commonwealth Connector). If your plan does not meet these requirements, you could be subject to tax penalties starting January 1, 2009.

Important: As a Massachusetts resident, it is your responsibility to see that your coverage meets MCC requirements, or face tax penalties.

MCC Requirements
A plan does not meet MCC requirements if any of the following applies:

• The in-network deductible is more than $2,000 for an individual and/or $4,000 for a family.
• A broad range of medical benefits, as defined by the Commonwealth Connector, are not covered.
• Prescription drugs are not covered.
• The deductible for prescription drug coverage is more than $250 for an individual and/or $500 for a family.
• The health plan includes deductibles or coinsurance for in-network core services, but does not include an out-of-pocket maximum.
• The health plan includes deductibles or coinsurance for in-network core services, but the out-of-pocket maximum is more than $5,000 for an individual and/or $10,000 for a family.
• The health plan includes deductibles or coinsurance for in-network core services, but the out-of-pocket maximum does not include one or more of the following for in-network services: copayments over $100, coinsurance, or deductibles.
• The health plan imposes an overall annual maximum benefit or a per illness annual maximum benefit for covered core services.
• A fee schedule is imposed on indemnity benefits for in-network covered services.
• The deductible for in-network benefits does not exclude the required minimum of three preventive care visits for individual coverage and six preventive care visits for all other coverage types (i.e., two-person, individual plus child, family).

Massachusetts health plans, including Tufts Health Plan, will be required to provide materials - such as benefit summaries and Form MA 1099-HC - that indicate whether a plan meets these requirements. If a document indicates that a plan does not meet the state requirement, it will indicate the reason why.

It's important to note that although your Tufts Health Plan coverage alone may not meet state MCC requirements, your plan, when combined with other health care coverage, may meet state requirements for minimum coverage; for example, if you receive pharmacy or other coverage elsewhere. Massachusetts residents who do not have access to MCC plans through an employer group are eligible to enroll directly with Tufts Health Plan.

For More Information
If you'd like to know more about penalties that may apply, you may contact the Commonwealth Health Insurance Connector Authority at 1-877-MA-ENROLL or 1-877-623-6765.

Or you may visit the state Department of Revenue Web site.