2018 Massachusetts EMAC Payment Update

In August of 2017, Massachusetts passed H.3822 “An Act Further Regulating Employer Contributions to Health Care”. The purpose of the act is to reinforce the finances of the Commonwealth’s Medicaid and Children’ s Health Insurance (CHIP) programs (MassHealth). Since the implementation of the Affordable Care Act, many states have seen health coverage shift from private employers to the state’s Medicaid program. Primarily due to expanded Medicaid eligibility, many more employed individuals are taking subsidized care through the exchanges and Medicaid versus their employer’s plan. Currently Massachusetts covers 1 in every 4 residents on MassHealth.

To help ease some of this fiscal burden, effective January 1, 2018, the Commonwealth has instituted a temporary, two year, two tiered assessment on employers expected to collect $400 million over 2018 and 2019.

Employer Assessments:

    • Tier One – An increase in the Employer Medical Assistance Contribution (EMAC)* rate currently paid by employers, resulting in a maximum per employee annual contribution of $77 in 2018 and 2019 instead of the current $51;
    • Tier Two – A separate, targeted EMAC payment requiring employers to pay an additional 5% of wages on the first $15,000 in annual earnings ($750 maximum per employee) for each non-disabled employee who is enrolled in a state-subsidized health plan, MassHealth or ConnectorCare – regardless of whether the employer offers a group health plan or whether the employee is a full or part-time employee.

*EMAC is a MA payroll tax paid by employers. Its purpose is to help finance the cost of subsidized care for low income MA residents. The EMAC was effective 1/1/14 to replace the MA Fair Share Contribution when it was repealed in lieu of the ACA. EMAC applies to employers with 6 or more employees in a quarter. Contributions to EMAC are paid on the first $15,000 of each employee’s wages.

The program will be administered by the Department of Unemployment Assistance (DUA). The DUA will match quarterly wage reports with MassHealth and ConnectorCare records to determine which employers owe the assessment and how much. The amount owed will appear on the employer’s DUA statement in the section showing the employer’s Unemployment Insurance liability. Payment is due on or before the last day of the month succeeding the quarter in which wages were paid and reported. Employers can check to see if the state’s calculations match their own records online after the EMAC Supplement is calculated.

For more information/FAQs from the DUA, click here.

HIRD Form is Back
Employers will be required to annually submit a new version of the HIRD (health insurance responsibility disclosure) form, also beginning in 2018 to verify information that is currently self-reported by individuals who apply for public health insurance programs. The new Massachusetts healthcare coverage form is an annual report on the employer’s offer of health insurance to its employees, including information on eligibility, cost, benefit design and employee contributions. The final version of the form and regulations governing its completion will be available in early March for employers to use in their 2018 healthcare reporting. More guidance on the form and when/how to file will be forthcoming. Employers who knowingly falsify the form or fail to file it face a penalty of $1,000-$5,000, according to state law.

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