Fair Share Contribution

Employers of 11 or more full-time-equivalent employees will pay an annual Fair Share Contribution of up to $295 per employee if they do not make a “fair and reasonable” contribution to an employee health plan.  The funds will help pay for health plans for people who do not have the option of employer-sponsored health insurance.

As of July 1, 2007, it applies to employers that:

• Have 11 or more full-time-equivalent employees in Massachusetts.
• And do not make a “fair and reasonable” contribution towards health insurance for their employees.

How do you know if you have 11 or more full-time-equivalent employees?

1. Count up the payroll hours for all who worked for at least one month during the period from October 1, 2006 through September 30, 2007.

2. For any single employee who worked more than 2000 hours, count 2000 hours only.

3. Divide the total by 2000 hours to get the number of full-time-equivalent employees.

A “fair and reasonable” contribution is:

1. 25% of full-time employees participating in the employer’s group health plan.

2. Or an employer contribution of at least 33% toward a health plan premium for all full-time employees who are employed more than 90 days.

A full-time employee is:

Someone who works 35 hours or more per week at a Massachusetts location (even if they live in another state).  This definition applies to the employees who are offered health plan benefits under the tests for a "fair and reasonable" contribution.  It is not the definition to use to determine if an employer has 11 or more full-time-equivalent employees (see above).

A full-time employee is not:

• Independent contractors.
• Seasonal employees.
• Temporary employees are not considered full-time employees.
• Workers from temp agencies (they are the temp agency’s employees).

Fair Share Contribution rules are determined in law and by the Division of Unemployment Assistance (DUA).