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DUA Proposes Employers Temporarily Contribute More to Health Insurance

Published:  November 28, 2017

The Massachusetts Department of Unemployment (“DUA”) has issued its proposed draft of regulations for the Employer Medical Assistance Contribution (“EMAC”) Temporary Supplemental Contributions Plan. This Act will apply to covered employers starting January 1, 2018, and will conclude on December 31, 2019.

These regulations stem from an “Act to Further Regulate Employer Contributions to Health Care,” signed into law by Massachusetts Governor Charlie Baker on August 1, 2017.  This Act increases the EMAC Supplemental Contribution amount; imposes a penalty fee of up to $750.00; and imposes other requirements for employers. Under the DUA’s proposed regulations, EMAC Supplemental Contributions do not count toward unemployment insurance. Another aspect of the DUA’s proposed regulations is the enumerated conditions upon which an employer will be subject to EMAC Supplemental Contributions.

Under the proposed regulations employers with six or more employees in any quarter are subject to EMAC Supplemental Contributions for each such quarter.  Additionally, employers may be subject to EMAC Supplement Contributions if one or more of its employees received health insurance through MassHealth agency or ConnectorCare for a continuous period of at least 14 days. However, this proposed regulation has exceptions that could alleviate an employer from being subject to EMAC Supplemental Contributions entirely.  We recommend seeking legal counsel to assess whether, as an employer, you meet any of the exceptions the proposed regulation provides.

DUA’s proposed regulations also state that an EMAC Supplemental contribution is not considered an unemployment insurance contribution and cannot be reported on Form 940.  Other topics in the proposed regulations include: (1) when payments are due; (2) what penalties will be imposed; and (3) how employer’s liability amount will be calculated. We recommend employers review the proposed regulations with counsel to ensure compliance before the January 1, 2018, implementation date.  

Should you have any questions about this topic or other labor and employment related matters please contact the lawyers at Royal, P.C., for further discussion.