Massachusetts Health Care Changes: Repeals Fair Share Contribution and HIRD Requirements; Implements Employer Medical Assistance Contribution

09/15/2013

Massachusetts repealed two components of its 2006 health care reform law. Employers are no longer required to make a fair share contribution towards employees’ health insurance. Previously, employers with 11 or more employees were required to make a fair contribution towards employees’ insurance premiums or pay a fee of up to $295 per employee. This repeal is effective July 1, 2013 however any outstanding fair share contribution payments prior to this date are still due.

In addition to the repeal of the fair share contribution, employers no longer have to collect the health insurance responsibility disclosure (HIRD) forms from employees who decline an employer-sponsored health plan starting July 1, 2013.

Although these repeals are a relief to employers, another provision was added to the budget that creates an Employer Medical Assistance Contribution (EMAC) with a January 1, 2014 effective date. This assessment impacts Massachusetts employers with more than five employees. The amount of the EMAC is .36% (i.e., .36 of 1%) on all wages up to the Massachusetts unemployment insurance taxable wage base, which is currently $14,000. This comes out to a $50 per employee per year cost. The .36% assessment is reduced to .12% in the first year and .24% in the second year to employers newly subject to Massachusetts employment law.