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AIM Calls on Legislature to End MassHealth Assessment on Employers

Posted on March 26, 2019

Editor’s note – AIM Vice President of Government Affairs Katie Holahan today delivered the following testimony to the Legislature’s Joint  Committee on Labor and Workforce Development in favor of ending the MassHealth employer assessment.

Associated Industries of Massachusetts (AIM), on behalf of its member companies, supports H.1647, An Act relative to repealing the employer medical assistance contribution tax. We support an end to the two-year assessment imposed on employers to close a financial gap at the state’s MassHealth insurance program for low-income residents.

AIM believes the assessment is no longer necessary as employers last year paid tens of millions of dollars more than anticipated originally under the levy.

The prior, existing Employer Medical Assistance Contribution (EMAC) assessment increased from $51 to $77 per employee, and employers were required to pay up to $750 for each worker receiving public health benefits. By the time the EMAC assessment sunsets in 2019, Massachusetts businesses are on track to contribute $519 million instead of the $400 million envisioned under the 2017 legislation ” or 30 percent more than originally estimated.

At the same time, enrollment in MassHealth has fallen as the administration has initiated steps to ensure that only those eligible for benefits receive them.

The Legislature passed the assessment in July 2017, minus a set of structural reforms proposed by the governor to place the MassHealth/Medicaid program on a firm financial footing. The assessment fell most heavily upon companies whose employees elect to use MassHealth rather than the employer-sponsored health plan.

AIM member employers are proud to lead the nation in providing health care coverage to their employees. Sixty-five percent of Bay State companies offer health insurance coverage to their workers, compared with 56 percent of employers nationwide. A full 100 percent of Massachusetts employers with 200 or more employees offer coverage.

As health-care premium and utilization costs continue to grow, employers have fewer options and less flexibility to keep year-over-year increases in check, raising important concerns about their ability to offer comprehensive insurance to their employees. Adding the cost of the state’s public health insurance program is not a sustainable financial plan, long-term.

Employers stand ready to work with policymakers to make comprehensive structural reforms to both the MassHealth program and commercial insurance markets to make the financing of health care for all Massachusetts residents sustainable this year and for many years to come.