Baker Administration Secures One-Year Waiver from Affordable Care Act Provision

Massachusetts Governor Charlie Baker announced today, June 16, the Commonwealth of Massachusetts has secured a one-year waiver from the U.S. Department of Health and Human Services, authorizing the Commonwealth to maintain the use of its existing rating factors that are otherwise prohibited under the Affordable Care Act.

Gov. Baker made the request to Health and Human Services Secretary Burwell in April because of the concern about the impact the Affordable Care Act market rules will have on small businesses.

“Protecting small businesses from massive insurance rate hikes is essential to making sure job creators continue to thrive here and I am grateful the Obama administration granted Massachusetts this flexibility,” said Gov. Baker, in a press release. “The Commonwealth has been a national leader when it comes to making sure our residents are insured and able to receive the care they deserve and we must protect that progress.”

The waiver from U.S. Department of Health and Human Services extends the Commonwealth’s current transition period first granted in 2013 and extended in 2014, allowing small group market issuers to continue using 2/3 of current ratings factors through January 1, 2017, after which the ratings factors will be reduced to 1/3, before being phased out entirely on January 1, 2018.

Massachusetts insured a majority of its residents under healthcare reform in 2006, establishing a state marketplace that merged small group and individual insurance markets. The ratings factors served as a protection for small employers who took on risks from the individual insurance market.