One states the amount an employer would have to pay toward employee health insurance in order to avoid an annual assessment of $295 per employee. A second states the amount of a surcharge on employers whose employees use public health care. The third specifies the information that employers would have to file with the state about the healthcare status of their workers.

The $295 assessment. Employers with over 10 full-time employees have two means of avoiding the payment of the $295 annual assessment. One occurs if a quarter of the full-time workforce is enrolled in the company's health plan. Alternatively, companies that don't meet that criterion may also avoid the assessment by contributing at least 33 percent of the premium cost of an individual health plan. The Division says that about 2,800 employers would pay the assessment.

The "free rider" surcharge. Employers who don't contribute to or arrange for health insurance are subject to a surcharge if employees use state-funded health services. The surcharge applies to employers of over 10 employees but only under two circumstances: one, if a worker or his or her dependents have more than three state-funded claims in a year, or two, if a company as a whole has at least five claims by different employees in a year and the total bill is over $50,000.

The calculation of the surcharge factors in the number of employees, the number of admissions for public health care, the total amount spent for the public health services to those employees, and the percentage of employees for whom the employer provides insurance. Once those numbers have been computed, the surcharge will be based on a sliding scale, depending on the size of the workforce. It is expected to range from 10 percent to 100 percent of the state's cost. The Division will notify employers of the amount of the surcharge at the close of each fiscal year.

Health Insurance Responsibility Disclosure (HIRD). This component requires each Massachusetts employer to fill out a HIRD form and specifies the information that will be required. The initial HIRD form will be due on May 15, 2007. Employers of over 50 will have to complete subsequent HIRD forms on a quarterly basis. All employers regardless of size will submit annual HIRD updates. The form will tell the Division whether employees were offered employer-sponsored coverage and whether they accepted or declined. Employees who decline will have to file a form acknowledging their responsibility for medical care.

What's next? The Division is currently holding public hearings soliciting feedback. It anticipates that the proposal, possibly as altered by the public hearings, will be finalized this month and take effect in October.