MANSFIELD - The state's new health insurance law is as much about confusion as it is about requirements for area employers.

About 125 of them heard about the complicated mandates firsthand Wednesday from Eric Dahlberg, an associate with the Commonwealth Health Insurance Connector Authority, who addressed members of the three area chambers of commerce at a breakfast gathering at the Holiday Inn in Mansfield.

With business owners wondering how the law would apply to them, Dahlberg laid out the regulations that have been drafted so far for the law that requires almost all adults in Massachusetts to have at least minimum health insurance coverage as of July 1.

Those who do not comply will be charged penalties on their state income tax starting next year, and employers who are required to offer coverage but fail to do so will be fined.

The bottom line, according to Dahlberg, is that "all Massachusetts residents must have insurance." They can get that coverage either on their own or through their employer, he said.

The state is offering coverage for uninsured residents under two basic programs - Commonwealth Care with free or subsidized plans for lower-income households earning up to 300 percent of the poverty level, and Commonwealth Choice for higher-income residents who have to pay the full cost of their premiums.

To meet the requirement, most businesses will have to offer coverage and pay part of the cost or face penalties in what the state calls a "shared responsibility" approach to mandated health insurance, the first of its kind in the nation.

As Dahlberg explained, the regulations require that employers with 11 or more full-time equivalent employees will have to offer a group health plan to full-time workers. They will also have to contribute to a plan and have at least 25 percent participation, or pay at least 33 percent of the premium costs. If not, the employer will be fined up to $295 a year per employee.

That low amount concerned state Rep. Betty Poirier, who told Dahlberg that some employers may choose to pay the $295 instead of offering coverage to their employees, and the state would then end up with even more uninsured residents who have to try to get insurance on their own.

Employers with more than 10 employees will also have to offer what is called a "Section 15 plan" so employees can pay their insurance premiums through their company on a pre-tax basis, even the employees who are buying insurance on their own. Businesses that do not provide the plan may be assessed a surcharge.

Employers will also have to file disclosure forms for employees who are offered health insurance but decline the coverage.

The Connector Authority, the new state agency responsible for implementing the health insurance law, recently endorsed an assortment of plans from seven insurance companies for the Commonwealth Choice program. The plans will be available to uninsured people and to small businesses beginning May 1, and premiums would vary depending on the coverage and the age of the insured.

Specifics of the plans' benefits and pricing levels will be posted on the Connector's Web site sometime this spring.

The Connector Authority is also considering a requirement for prescription drug coverage, but that would not kick in until September 2008. With the July 1 deadline looming for implementing the law, some business owners wondered how Massachusetts residents would know about the mandates.

Dahlberg said the new law requires the state Department of Revenue to mail information to all tax filers in the state to make sure everyone is aware of the requirements and their own responsibility to obtain coverage.

"This affects everyone in the state because of the individual mandate," he said.

Dahlberg advised employers and all state residents to regularly check the Connector Authority's Web site at www.mass.gov/connector for the latest information on the law.

The three chambers of commerce, which included the Attleboro chamber, North Attleboro and Plainville chamber, and Tri-Town chamber that covers Mansfield, Foxboro and Norton, are planning another forum in May so state officials can update businesses on the law's implementation.