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How to start and run a successful black business today – making a profit

Associated Press | 3/30/2010, 11:08 a.m.
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Massachusetts is facing a host of perplexing questions as it looks to mesh its landmark 2006 health care law with the sweeping health overhaul approved by the U.S. House.

One of the thorniest questions focuses on the so-called “individual mandate” — the tax penalties levied on those who refuse to obtain health insurance.

Massachusetts is the only state with an individual mandate. In 2009, those who failed to get insurance even though the state deemed they could afford coverage faced an annual penalty of nearly $1,100.

Under the federal bill, which President Barack Obama signed last week, those who don’t get insurance will begin facing federal tax penalties in 2014, with individuals having to pay fines reaching $750 by 2017.

What’s unclear is whether Massachusetts residents without insurance would face both a federal and state penalty.

State officials said Massachusetts could either ask for an exemption from the federal mandate or adjust its own fines so uninsured residents wouldn’t be hit twice.

“There is a provision that would allow states to apply for waivers,” said Massachusetts Health and Human Services Secretary Dr. JudyAnn Bigby. “We have a very strong case for making a point that we have some of these policies in place related to the individual responsibility (mandate).”

Bigby also said that the bill gives the federal secretary of health and human services leeway in drafting regulations to match the intent of the legislation — leeway that could take into account Massachusetts’ early role in establishing an individual mandate.

The individual mandate isn’t the only element of the federal legislation that clashes with state law.

Under the Massachusetts law, businesses with 11 or more workers who fail to offer insurance to their workers face an annual fine of $295 per full-time employee.

Although the federal legislation doesn’t require businesses to offer coverage, it hits employers with a $2,000-per-employee fee if the government subsidizes their workers’ coverage. Companies with fewer than 50 full time employees would be exempt under the federal bill.

Another area of potential conflict between the state law and federal bill is on the creation of state-based “exchanges” beginning in 2014 that would allow individuals to pool their resources to gain the same kind of health care purchasing power of big companies.

Under the 2006 law, Massachusetts created its own health care exchange — known as the Health Care Connector — that oversees the law, setting regulations and helping connect individuals with lower cost private health plans.

Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector Authority, said the federal bill also allows for regional exchanges, meaning that smaller states like Rhode Island have the option of creating their own exchange or joining with Massachusetts.

Many of the conflicts between the state law and the federal bill were inevitable given that the Massachusetts law provided the blueprint for the legislation, leading to many overlapping policies, according to Kingsdale.

“There’s a bunch of decisions to be made,” he said. “The devil is in the details and a lot of those details aren’t clear.”