Massachusetts Health Insurance Rules

The Massachusetts Health Reform Act of 2006 requires state residents to purchase health insurance. Those who don't must pay a state tax penalty. While some residents may be exempt from this law based on their religion or recent financial hardships, the majority of residents need to purchase coverage.

Adults

• Adult Massachusetts residents need to purchase an insurance plan that offers state-defined Minimum Creditable Coverage (MCC). To be considered in compliance with MCC, the plan must provide a number of services, including hospitalization, preventative screenings, mental health care, substance abuse care and prescription drug coverage. Adult residents who do not purchase an MCC-compliant plan must also pay a tax penalty.

Young Adults

• Young adults may remain on their parents' insurance plan until they're 25 years old or they've spent two years off of their parents' taxes as dependents, whichever occurs first. For adults aged 18 to 26 who must buy health insurance, the state offers low-cost plans specifically designed for young residents.

Employers

• According to the Massachusetts Health Reform Act, full-time employers who do not offer their workers any health plan options still have certain financial responsibilities related to their employees' health. These employers must pay a "Fair Share Contribution" fee, estimated to be around $295 per employee, that covers costs accrued when the uninsured use state services. Employers whose workers use state service frequently must pay a more substantial "Free Rider Surcharge" that covers 10 to 100 percent of state health costs, with the first $50,000 waived for each employer.