Final EMAC Supplemental Contribution Regulations

Massachusetts Department of Unemployment Assistance (DUA) released the final regulations for the new Employer Medical Assistance Contribution (EMAC); this is a second-tier contribution called the EMAC Supplemental Contribution.

Background

“An Act Further Regulating Employer Contributions to Health Care,” was signed into law on August 1, 2017. The Act temporarily increases current employer fees and imposes new second-tier penalty fees on employers, which will help finance the Commonwealth’s Medicaid and CHIP Programs, known as MassHealth. The Act is applicable to covered employers for 2018 and 2019 and will sunset on December 31, 2019.

Final Regulations

The final regulations include some changes from the proposed regulations that we previously reported in our November 14, 2017 Tax Alert. Below are some of the notable changes.

Definition Change: Liability for EMAC Contribution Supplement

A covered employer will be liable for a payment of the EMAC Supplement if one or more non-disabled (as defined under Title XVI of the Social Security Act or state law) employees receives health insurance coverage through MassHealth or ConnectorCare and coverage continues for at least 56 days, this was previously 14 days in the proposed regulations. The employer will not be liable for a payment for employees who only enroll in MassHealth Premium Assistance Program.

Covered Employer Clarification

Employers with at least six employees in any quarter may be liable for an EMAC Supplemental contribution, beginning January 1, 2018. Non-profits and government employers are considered covered employers regardless of how they have chosen to finance unemployment insurance benefit charges. The final regulations clarifies that cities, towns, regional school districts, and educational collaboratives, shall not be subject to or liable for payment of the EMAC Supplement unless they have accepted liability under M.G.L. c. 29, § 27C. Successor employers will be liable for the EMAC Supplemental contribution, which may apply during the quarter of the ownership change and are not permitted any credit for any EMAC Supplement paid by a predecessor.

Liability Appeals Clarification

The employer’s liability for the EMAC Supplemental contribution is determined by the DUA, who will use information provided by the Division of Medical Assistance and ConnectorCare. The employer will receive a determination letter from the DUA, which will include the assessed liability amount. This information will be included on the employer’s online DUA account and the amount owed will be added to the employer’s statement.

Employers who want to appeal a liability determination for the EMAC Supplemental payment may request a hearing or make the payment within 10 days of receipt of the determination notice.

The final regulations includes an additional provision on how to determine date of receipt of an electronically transmitted notice of determination by the DUA. “When a notice of a determination by the DUA Director is transmitted by means of an electronic communication, it shall be presumed received on the date it is sent, except that any notice transmitted after 5:00 P.M. or on a state or federal holiday, Saturday, or Sunday, shall be presumed received on the next business day. When notice of a determination is sent by regular mail, it shall be presumed received three days after it is mailed, except that if the third day falls on a state or federal holiday, Saturday, or Sunday, the notice shall be presumed received on the next business day. However the notice is transmitted, the presumption may be rebutted by substantial and credible evidence satisfactory to the DUA Director that the notice actually was received on an earlier or later date.”

The DUA has additional information and resources available for both the EMAC Contribution and the EMAC Supplemental Contribution on the agency website.

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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.