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Budget Assumes EMAC Assessment Will End in December

Posted on July 25, 2019

Sometimes the real value of legislation is found in the things left out of a bill.

StateHouse-resized-600Such was the case this week as the Massachusetts Legislature passed a $43.1 billion budget for the fiscal year that began July 1. The spending blueprint included important elements ranging from curbs on the cost of prescription drugs in the state Medicaid program to increased aid for public schools.

But the most significant part of the budget for employers lies in what was left out ” an extension of the onerous two-year assessment on Massachusetts businesses to fund a budget shortfall in the MassHealth insurance program for low-income people.

The Legislature passed  an increase to the Employer Medical Assistance Contribution (EMAC) in 2017.  Employers have already paid tens of millions of dollars more than anticipated under the levy, some $519 million by the time the assessment sunsets at the end of this year instead of the $400 million envisioned under the legislation.

AIM in January called for an immediate end to the so-called EMAC assessment. The association also engaged a diverse coalition of organizations ranging from human services providers to home-care aides and trade associations to urge key legislators not to extend the two-year assessment in the Fiscal Year 2020 budget.

Employers are gratified that the Legislature is sticking to the original plan to sunset the tax at the end of 2019.

The assessment falls most heavily upon companies in which employees elect to use MassHealth rather than the employer-sponsored health plan. The assessment has increased EMAC from $51 to $77 per employee, while employers are also required to pay up to $750 for each worker who receives public health benefits.

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.

Employers stand ready to work with policymakers to make long-term structural reforms to both the MassHealth program and the commercial insurance markets to make the financing of health care for all Massachusetts residents sustainable.