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Massachusetts Increases Employers’ Health Care Assessments

On Behalf of | Nov 15, 2017 |

Massachusetts Governor Baker has signed Bill H. 3822 “An Act Further Regulating Employer Contributions to Health Care” (the “Act”), which will temporarily increase fees for the state’s Employer Medical Assistance Contribution (“EMAC”) program and create a new penalty to help fund MassHealth.

Employer Medical Assistance Contribution Program. EMAC contributions fund subsidized health care to low-income Massachusetts residents. Each employer that is subject to unemployment insurance contributions is also subject to EMAC reporting requirements.

Employers that have an average of more than five employees per quarter must pay contributions based on the first $15,000 of each employee’s wages paid during the calendar year. The amount of the contribution is determined by multiplying these wages by a specified rate. Before the Act, the maximum EMAC contribution rate was 0.34% up to the annual wage of $15,000 ($51 per employee). Now, for 2018 and 2019, the rate increases to 0.51%, or $77 per employee.

MassHealth. In Massachusetts, Medicaid and the Children’s Health Insurance Program (CHIP) are combined into one program called MassHealth. MassHealth members may be able to get doctors’ visits, prescription drugs, hospital stays, and many other health care services.

Also, the MassHealth program, among other things, allows an employee to enroll in his or her employer’s group health plan, and receive premium assistance, at any time he or she becomes eligible for the program.

The Act created a new assessment to help pay for MassHealth. Under the Act, employers, again with more than five employees, will be required to pay 5.00% of annual wages up to a maximum of $15,000 (that is: $750 per affected employee) for each non-disabled employee who: (i) obtains health insurance coverage from MassHealth (excluding the premium assistance program), or (ii) qualifies for subsidized coverage through the Connector (which is the ACA Marketplace in Massachusetts).

The Act says that the Commonwealth’s Department of Unemployment Assistance, in consultation with the Connector and the Division of Medical Assistance, is directed to implement regulations implementing the new employer assessment.