United States: Massachusetts Division Of Unemployment Assistance Issues Final Regulations Implementing The EMAC Supplemental

Last Updated: January 10 2018
Article by Alden J. Bianchi

As we reported in a previous post, Massachusetts Governor Charlie Baker in August 2017 signed into law H. 3822, "An Act Further Regulating Employer Contributions to Health Care" (the "Act"). Among other things, the law increases the Employer Medical Assistance Contribution ("EMAC") and also imposes a tax penalty—or "EMAC supplement"—on Massachusetts employers with more than five employees. The supplement is 5% of a covered employee's unemployment insurance taxable wages up to the $15,000 per year (i.e., a cap of $750 per covered employee) for each nondisabled employee who receives health insurance coverage through the Massachusetts Division of Medical Assistance (i.e., MassHealth) or subsidized insurance through the Massachusetts Health Insurance Connector Authority (i.e., ConnectorCare).

The EMAC supplement take effect as of January 1, 2018. The Massachusetts Division of Unemployment Assistance (DUA) previously issued a draft regulation, which we discussed in our post of November 20, 2017. The DUA has now issued a final regulation, which is the subject of this post.

Background

The EMAC rules were adopted in 2014 following the repeal of the Massachusetts "fair share contribution" requirement. (The fair share requirement of the historic Massachusetts health care reform law imposed penalties on employers that failed to offer group health plan coverage. Following the enactment of the Affordable Care Act's employer mandate, the Massachusetts Legislature deemed the fair share requirement, but not the accompanying need for revenue, unnecessary.) EMAC applies to employers with more than five employees in Massachusetts and applies regardless of whether the employer offers health coverage to its employees.

The Act increased the basic EMAC contribution rate to 0.51% from 0.34% up to the annual wage cap of $15,000 (i.e., a maximum of $77 per employee per year). It also added a temporary contribution requirement—the EMAC supplement—that applies when employees who are non-disabled and either obtain health insurance from MassHealth (excluding the premium assistance program) or receive subsidized coverage through the Massachusetts ConnectorCare program ("subsidized coverage"). The EMAC supplement is based on the wages of employees who receive health subsidized coverage. For each such employee, an employer pays 5% of the employee's annual wages, subject to an annual wage cap of $15,000, for a maximum annual liability of $750 per affected employee. Because the calculation is based on wages and not hours worked, an employer is responsible for each employee with subsidized coverage regardless of whether the employee is part- or full-time.

Collection of EMAC Supplement Payments

According to the DUA, "Information will be available online for each employer after the Employer Medical Assistance Contribution Supplement has been calculated." (In an earlier post, we cautioned against employers asking employees whether they are receiving subsidized coverage.) Supplemental payments will be included with the employer's Unemployment Insurance liability. The liability begins January 1, 2018 and lasts through the end of calendar year 2019. Employers will see the change on their first quarter statements in April 2018.

The Final Regulations

The EMAC final regulations generally follow the proposed rule with minor changes. There is little for employers to do until they receive their EMAC supplemental assessment at the end of the first quarter of 2018. It is at that point that the final regulations' provisions relating to payment and collection of contributions or payments, and the disclosure of information, may need to be consulted.

The final regulation directs the MassHealth and the Connector to provide DUA "with such information as DUA determines necessary to determine liability for the EMAC Supplement" and to administer these rules. DUA must, in turn, "protect the confidentiality of Member Information provided by the MassHealth Agency and the Connector." DUA is permitted to furnish an employer that it determines is liable for the EMAC Supplement "with access to Member Information for purposes of reviewing and/or appealing such liability," in accordance with yet-to-be issued procedures established by DUA. Employers that receive member information are further admonished to "maintain the confidentiality of such Information . . . ." In particular, employers are barred from using or disclosing member information to disparage or retaliate against any employee or other individual. Prior to receiving member information, employers are required to sign a written acknowledgement of their obligations to maintain the confidentiality of such information, in such form and pursuant to, again, "such procedures established by DUA."

The Impact of the HIPAA Privacy Rule

The HIPAA Privacy Rule protects individuals' individually protected health information (PHI) where that information is held by a covered entity or by a business associate of the covered entity. Enrollment and disenrollment information is generally PHI. State laws that are contrary to the privacy rule are preempted by the Federal requirements, unless a specific exception applies. These exceptions include if the State law, among other things, requires certain health plan reporting, such as for management or financial audits. The final regulation's treatment of member information appears to fit squarely into this exception.

Conclusion

Employers are right to be concerned about their exposure to liability under the EMAC supplement, particularly since there is little that they can do to control it. If the employers offer generous affordable coverage, employees will not be able to claim subsidized coverage from the Connector. But if an employee chooses to skip the employer's coverage and instead applies and qualifies for MassHealth, the employer will be subject to penalty. What remains to be seen is the extent to which employers have a sense that the EMAC supplemental assessments seem fair, and if not how difficult or challenging the appeals process might be.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Alden J. Bianchi
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions