Employer Medical Assistance Contribution (EMAC) Penalties Hit MA Employers Hard

by | May 10, 2018 | Employee Benefits, Farrell Backlund, FBinsure, Health, Health Insurance, Healthcare

Massachusetts’ law is now imposing a penalty on employers with employees enrolled in subsidized health coverage, like MassHealth in place of an employer’s plan. These modifications are hitting employers hard!  This act, passed in August 2017 is now effective for wages paid as of January 1, 2018 and expires at the end of calendar year 2019.  It boils down to this simple fact: the State has a deficit paying for MA Health and the EMAC charge is the intended answer to that problem.  Read below to understand how these charges break down.

The contribution is 5% of the annual wages for every non-disabled employee, up to the annual wage cap of $15,000 maxing out at $750 per affected employee per year. The contribution does not apply to employees who earn less than $500 in wages per quarter. Employers can and will be charged for part time employees earning more than $500 a quarter.

This means if an employee is working for you and is on MA Health or a subsisted Connector plan you will be charged up to $750 in 2018 & 2019.  Now there is no limit to how many employees you can be charged for and there is no way to know how many employees you have in this situation until you get the bill.  This makes it a disastrously hard cost to budget for.

What’s the upside?  Well, you have the right to appeal the charges and ask for a hearing, but there are  only a few reasons that a hearing will be scheduled.  They are:

  • If you employ less than six employees.
  • If the wages in question were submitted for an independent contractor.
  • If your employee is on your health plan.

It does not matter if you offer an affordable plan you will still be charged this assessment.  To read more about this for more information, download our Compliance Bulletin or  visit Mass.gov.  If you have questions or would like to evaluate your current benefits plan you call our Benefits Manager, Rich Volkmann.


Related Posts