MASSACHUSETTS: EMPLOYER MEDICAL ASSISTANCE CONTRIBUTION TAX UPDATE

The Employer Medical Assistance Contribution (EMAC) will be increasing in 2018, per new legislation signed by Governor Charlie Baker. The state of Massachusetts has a $600 million MassHealth shortfall, which will be funded by the addition of a second tier tax. The employer state unemployment insurance rates (SUI) will be offsetting these rates. An overview of the legislation is as follows:

  • The current EMAC will see a two-year rate increase beginning in 2018 of $200 million per year.
  • A two-year SUI rate decrease will offset this rate, saving employers $335 million during the same time period.
  • Employers with 6 or more employees are affected by the EMAC, which will rise from 0.34% to 0.51%, bringing the cost per employee from $51 to $77.
  • The new tier introduced in the legislation is a public health care tax. Employees electing public health care plans instead of their employer’s will have up to $750 (an extra 5%) in EMAC taxes.
  • The $15,000 taxable wage base will remain unchanged for both tiers.
  • This new legislation will move the SUI from Rate Schedule F to Rate Schedule D, then to Rate Schedule E in 2019.

The full bill can be accessed here. Also, as always, please feel free to contact us regarding any questions you may have on this matter.

 


Print Page