The Brabo Benefits Team discussing the latest issues that companies face.
On Aug. 1, 2017, the State of Massachusetts passed a new law (H.3822 New Employer Healthcare Assessment), increasing the existing Employer Medical Assistance Contribution (EMAC) and imposing a new assessment on employers.
EMAC, which was created in 2014, had previously been assessing employers 0.34 percent of their payroll to a maximum of $15,000, or around $51 per employee. The new law that has passed will assess employers .051 percent, or $77, per employee for any non-disabled employee enrolled in MassHealth or subsidized coverage through the Massachusetts Health Connector.
The law went into effect on Jan. 1, 2018, and, according to Scott Hokanson, at Brabo Benefits and Payroll, in Plymouth, will apply to employers with six or more employees – full-time OR part-time. The changes are part of a plan Gov. Charlie Baker proposed this past summer in an effort to get a handle on the rising costs of MassHealth.
“The state had a shortfall on MassHealth, and the government is turning to employers to make up that money,” Hokanson says. “The state is basically asking employers who have employees with MassHealth to pay for that shortfall.” In return, he says, this will cause employers to take a hit on employees’ wages – 5 percent up to $750.
The Department of Unemployment Assistance had stated, “In recent years, Massachusetts has seen an increase in health coverage from employer-sponsored insurance to publicly-subsidized coverage, increasing the costs to taxpayers. The shift from commercial coverage to public coverage has contributed to significant growth in MassHealth spending.”
According to the state’s website, mass.gov, this new increase is a “temporary supplemental contribution” for employers, and is intended to end in two years.
Hokanson says that when the Affordable Care Act went into effect, the number of people who signed up for MassHealth was overwhelming. It was well-intended, he says, “But this new law will hit all employers with employees on MassHealth – part-time, full-time, seasonal, everyone.” The state knows who is on MassHealth, he adds, and, after the employers file their 2018 quarterly wage reports in April, they will be receiving a notification about their liability. We do not know exactly how that is going to happen at this time.
“Employers will start receiving a tax bill they weren’t expecting,” Hokanson says. If an employee has multiple jobs, all employers will be assessed. “Employers need to know the appropriate, right and legal way to approach this with their employees.” Brabo, which has been in business since 2013, has been making itself available to employers, CPAs, etc., to try to explain how this new law will affect them, and walk them through the process. “We do our best to alleviate the stress,” Hokanson says.
The team at Brabo Benefits and Payroll works to ensure your company is compliant and your employees enjoy a positive work experience. Brabo offers trusted employee benefit and human resources advisors who provide exceptional service to their clients by helping them navigate the design, purchase and implementation of employee benefit plans.
On Cape Cod alone, the number of seasonal employees will be increasing soon, as spring and summer approach. The Brabo team works to ensure your company is compliant and your employees enjoy a positive work experience. Brabo will host an Employer Medical Assistance Forum on Feb. 22 at Cape Cod Five Cents Savings Bank in Sandwich. To register for this event or to get more information, contact Teri Stanley at 508-681-0918 or [email protected]. You can also contact Sean Randall at 508-272-2544 or [email protected].
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With over 600 clients around the South Shore and across Cape Cod, Brabo Benefits and Payroll can
provide you with the help you need to navigate through EMAC and the New Employer Healthcare Assessment. To speak to someone about the new law, or discuss your questions and concerns in regard to your own company, call (508) 830-3800 or visit brabobenefits.com.
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