BOSTON - Massachusetts has fined more than a thousand companies over $18 million for failing to offer medical insurance to their workers - a precursor of what some business owners fear could happen on a national scale if a sweeping health-care overhaul becomes federal law.
The fines are for violating Massachusetts' landmark 2006 health-care law that requires larger companies to offer insurance or pay an annual fine of $295 per full-time employee.
In 2008, 807 of 23,128 eligible Massachusetts firms were found liable for the fine. They were on the hook for a total of $8.6 million, or an average of $10,663 per employer. In 2007, 1,045 firms were found liable for $10.5 million, or an average of $10,047 each. Statistics for 2009 aren't available.
The Massachusetts law has been used as a blueprint for a national health-care bill heading to a critical vote in the U.S. House Sunday, and it could foreshadow how national health-care reform plays out across the country.
People are also reading…
Like the Massachusetts law, the federal legislation includes penalties for businesses that don't comply. While the federal bill would not require coverage as Massachusetts does, it hits employers with a $2,000-per-employee fee if the government subsidizes their workers' coverage.
The House bill would exempt companies with fewer than 50 employees, compared to the tighter threshold of companies with 11 or fewer workers under the Massachusetts law. The bill would also offer tax credits to help small employers provide coverage.
Overall, the state has added more than 400,000 people to the ranks of the insured since the law took effect, bringing the total number of insured residents to more than 97 percent.
That increase bucked a national trend.
Massachusetts business groups have been split on the state law's merits.
Rick Lord, president of the Associated Industries of Massachusetts, said that since 2006, more than 100,000 workers have signed up for insurance through their employers to comply with the law's "individual mandate" requiring nearly everyone have insurance or face tax penalties.
Other business leaders in Massachusetts are chafing.
Bill Vernon, state director for the National Federation of Independent Business, said the pressure to offer insurance is a "job inhibitor" at a time when the state has seen its unemployment numbers climb.