Update on Employer Health Care Assessment

Agreement Reached Between Legislature and Administration

The employer assessment issue- a major concern of MNN’s in recent months- has been resolved. Governor Baker signed into law an assessment that is targeted, smaller than the original proposal, and does not unfairly penalize nonprofits whose employees receive health insurance from other non-public sources. It is coupled with unemployment insurance rate relief in 2018 and 2019.
The original health care penalty, proposed by the Baker Administration in January, would have cost many employers $2,000 per employee. It was projected to raise $600 million per year. The penalty would have applied to employers with workers on spousal, parental, veterans, or Medicare coverage. It was intended to prevent migration of workers from employer-sponsored to public health insurance, but its impacts would have been far broader.
After hearing immediate feedback from members about how burdensome the proposed assessment was, MNN reached out to Administration and legislative leaders. In the months that followed, MNN worked with members, other employer associations, and state officials to identify better options. The assessment that emerged from those discussions was sent from the Governor to the Legislature late in June, coupled with a package of MassHealth and health insurance policy changes.
The Legislature voted for the revised employer assessment last week.  While they did not agree to immediate enactment of the policy changes, legislative leaders and the Administration have committed to working together to slow the growth of MassHealth costs, so they do not crowd out other important state programs.
The details of the assessment include:
  • January 1, 2018 effective date and will sunset 2 years after implementation.
  • For employers with 6 or more employees, an increase to a fee they already pay, the employer medical assistance contribution (EMAC), of $26 per employee annually.
  • For employers with 6 or more employees who have employees on MassHealth or ConnectorCare, an additional charge of up to $750 for each employee receiving those benefits (the assessment is calculated at 5% of the first $15,000 of annual pay).
  • Two years of unemployment insurance relief, estimated to save employers a total of $344 million in 2018 and 2019.
MNN appreciates the willingness of leaders in the Baker Administration and the Legislature to work with employers for a better solution. By engaging on this issue, MNN ensured that the perspective of Massachusetts nonprofits were front and center, cognizant that nonprofits operate on thin margins and are frequently being asked to do more with less.
Questions on the final assessment? Reach out to our Director of Government Affairs, Tonja Mettlach.