The Massachusetts Department of Unemployment Assistance (DUA) recently released a set of FAQs and draft regulations relating to the Employer Medical Assistance Contribution (EMAC). MA recently increased the EMAC for 2018 and 2019 (from $51 per employee to $77 per employee) and implemented an EMAC supplement contribution (for 2018 and 2019) for non-disabled employees who aren’t eligible for an employer group health plan and have coverage through the state (which may include MassHealth or the MA ConnectorCare Program). The EMAC supplement contribution applies to employers with more than five employees and is five percent of a covered employee's unemployment insurance taxable wages up to $15,000 per year (which results in a cap of $750 per employee).
The draft regulations confirm that the EMAC supplement contribution applies to employers with more than five employees in MA. That number is calculated by dividing the sum of the employer’s three monthly employment levels for the quarter by three. An employment level for each month of the quarter is equal to the number of employees who worked (or received wages) for any part of the pay period that includes the 12th of the month (as reported on the MA unemployment insurance return). There are no exceptions for part-time employees — so the EMAC supplement could potentially apply to both full and part-time employees. However, if an employee has health insurance coverage through MassHealth on the basis of permanent and total disability, the EMAC supplement contribution won’t apply.
The draft regulations address successor employers — those that continue the business following a merger, consolidation, acquisition or other reorganization. Generally speaking, successor employers are responsible for the EMAC supplement contribution, and they aren’t credited for any EMAC supplement contribution paid by the predecessor employer. Employers should work with outside counsel when it comes to EMAC responsibilities in a merger or other business reorganization.
Importantly, the draft regulations confirm that the EMAC increase and supplement contribution applies to nonprofit organizations and governmental entities. The regulations also address overpayments, refunds and general collection processes regarding the EMAC supplement contribution. Overall, employers should work with tax counsel and payroll providers to make adjustments relating to the change in EMAC and potential supplemental contribution.
Draft Regulations »