2019 will be the year that many employers learn more about the possible devastating effects of the MassHealth Premium Assistance Program! Will you be one of them?
Let’s hope not because this program could increase a company’s total benefits line item, which in most cases is already out of control. “Premium Assistance Program” sounds like a good thing, right? Wrong. Do not let title of the program mislead you. Not many people realize what the impact this program could have on companies.
I was recently talking to a State official about the overall cost of health insurance to companies and the added burden that the EMAC charges were having on employers. This office was actually excited to tell me about the Premium Assistance program as a possible relief from the EMAC charges. I took a breath and tried to be clam and respectful as I explained how the program works and how it is not a good program for companies.
The program works like this: The State is going to take the information provided by the HIRD filing that was just completed this past November by all MA companies with six employees or more. The State Department will determine which employees that are currently eligible for MassHealth are eligible for this program. If your employees are eligible for the Premium Assistance program, you the employer will be notified to put the employee on your plan. You will also be given a form to fill out which details what the payroll deduction will be for the employee. Your employee will receive a monthly check to offset the payroll deduction.
It is true the employer will no longer be charged the EMAC charge for the employee on Premium Assistance, but now they are paying the company’s percentage for that employee. The maximum charge under EMAC is $750 per year. The company cost to add an employee to a company plan could be as low as $3,000 for a single, but could go over $20,000 for a family depending on the cost of the plan.
The only entity that wins here is the state, once the person gets moved off of MassHealth. The person I was talking to had no idea the potential impact this program could have to companies. Do you have a plan if you receive several of these letters?
Reach out to me and we can discuss what options are for your organization.