State lawmakers have voted new assessments on employers to help stabilize MassHealth. The law was passed without including any of the reforms requested by Governor Baker to help curb the rising cost of MassHealth. Both the Senate and House leadership have stated they are committed to reforming Mass Health but for now no reforms have been adopted..
Governor Baker in indicating he will sign the legislation stated, "The Legislature told us they would work with us on this, and we are going to take them at their word."
MassHealth currently costs $16 billion annually. It represents about 40% of the state budget. The assessments are designed to help mitigate the impact of the increasing costs which are primarily due to the expanded eligibility rules under ACA reforms.
As of January 1, 2018, Employers will be subject to a new tax on businesses but without any of the corresponding reforms they had hoped would be included.
The assessments are effective January 1, 2018.
The Division of Unemployment Assistance and the Health Connector are responsible for issuing regulations.
This is a two-year assessment and is expected to raise $200 million in revenue.
The assessment is to be offset by an Unemployment Insurance rate reduction over the same two years.
The employer health assessment applies to employers with 6 or more employees (FT and PT).
The assessment has 2 tiers:
- An increase in the current EMAC, (employer medical assistance contribution), which is applied against the first $15,000 in wages earned by each employee. This represents a maximum per employee contribution rate of $77, ($51 is the current rate).
- A new, separate, targeted EMAC payment requiring employers to pay an additional 5% of wages on the first $15,000 in wages paid each employee (amounting to $750). This is applied to each non-disabled employee of the employer who is covered by MassHealth (not including the Premium Assistance Program) or by subsidized Health Connector coverage (ConnectorCare)
