Originally Published by Pat Collopy of Complete Payroll Solutions
EMAC 101
According to Mass.gov, the Employer Medical Assistance Contribution (EMAC) was created in 2014 after the Massachusetts Fair Share Contribution requirement was repealed. EMAC applies to any employer in Massachusetts with more than five employees, even if the employer doesn’t offer its employees health coverage.
Increases in EMAC
As MassHealth enrollment has increased, Massachusetts’ administration has undertaken several reform initiatives to address the growing shift from commercial coverage to public coverage that has significantly increased MassHealth spending. While these reforms are under review, there will be a time-limited increase in the EMAC.
Under the final regulations, for 2018 and 2019, the EMAC contribution will increase from .34% up to the $15,000 wage cap, with a potential maximum per-employee cost of $51 a year, to .51% up to the $15,000 wage cap, which ups the potential maximum cost per employee to $77 a year.
To help minimize the impact of the new assessment on employers, the law also reduces Massachusetts unemployment contribution rate for two years.
An Added Supplement
To offset the costs of employees on subsidized coverage, the regulations also outline a new supplement that applies to employers (including nonprofits and governmental employers) with more than five employees in Massachusetts whose non-disabled employees have insurance from MassHealth (except the premium assistance program) or subsidized insurance through the Massachusetts Health Connector, for more than eight weeks in the quarter.
The contribution is 5% of annual wages for every non-disabled employee (full time, part time or seasonal), up to the annual $15,000 wage cap and a potential maximum of $750 per affected employee a year. If an employee earns less than $500 a quarter, the contribution doesn’t apply.
Do You Have to Pay the Supplemental Fee?
For our clients, we will continue to send a wage report to DUA at the close of each quarter, which will be shared with MassHealth to determine if any employees are affected. DUA will then correspond with employers with information regarding any fees owed, which will be due within 30 days after the end of the quarter. For the first quarter of 2018, the supplemental fee is due by May 1.
Both the increased EMAC rate and the supplemental fee are effective for wages beginning January 1, 2018, through the end of calendar year 2019. If you have any questions regarding the additional liability, please contact your Client Relations Representative.
