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May 22, 2020

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Massachusetts Employers Should Prepare for Penalties and Other Changes to Law Regarding Health Care Contributions

In August 2017, Governor Charlie Baker signed into law, “An Act Further Regulating Employer Contributions to Health Care,” which became effective on January 1, 2018, and will remain on the books through the end of the 2019 calendar year. The Act, which changes the existing employer medical assistance contribution, was designed to close the $300 million budget deficit faced by the state’s Medicaid and Children’s Health Insurance Program (CHIP). The Massachusetts Division of Unemployment Assistances (DUA) recently released its draft Emergency Medical Assistance Contribution (EMAC) supplemental regulations, which provide additional details regarding the law.

Most significantly, the new law imposes a penalty on employers of up to $750 for each employee who is either enrolled in MassHealth or who receives subsidized coverage through the MassHealth Connector (“the Connector”), so long as the employee is not disabled.  Additionally, the new law also increases an employer’s EMAC contributions (i.e. the equivalent of unemployment health insurance contributions) from 0.34% to 0.51% of the employee’s wages. The Massachusetts Department of Unemployment Assistance will be enforcing these new requirements, and thus assessing penalties, by using wage information provided by employers and enrollment information provided by MassHealth and the Connector.

The new law will apply to any employer with 6 or more employees (including full-time, part-time, temporary and probationary employees) residing in Massachusetts in any calendar quarter. For purposes of calculating the six employee threshold, the headcount is based upon dividing the sum of the employer’s headcount for each month in the quarter and dividing that total by three.

Although the law became effective on January 1, 2018, employers will not see a charge until their first quarter statements in April 2018. Many of the changes in the law, including a modification to the unemployment insurance schedule, are technical and complex. Accordingly, we encourage employers to consult with counsel to determine whether they meet any of the exceptions to the law, and if not, to assess the impact of the new law and regulations.

© 2020 Proskauer Rose LLP.


About this Author

Mark W Batten, Labor & Employment Attorney, Proskauer Law Firm

Mark Batten is a Partner in the Labor & Employment Law Department and co-head of the Class/Collective Action Group, resident in the Boston office.

Mark represents employers nationwide at all stages of complex employment litigation, including class and collective actions on wage and hour matters and discrimination claims. Ranked by Chambers USA, Mark is hailed as “a fabulous lawyer, handling interesting and complex cases.” Clients “highly recommend him to anyone seeking litigation counsel in the Boston area,” as well as note “he is...

Samantha L. Regenbogen, Labor & Employment, Proskauer Law Firm

Samantha Regenbogen is a law clerk in the Labor & Employment Department. 

Samantha was a summer associate in Proskauer's New York Office, and was involved in drafting briefs and memorandums for both wage and hour class actions and single-plaintiff discrimination cases. Before joining Proskauer, Samantha was an intern with the Enforcement Unit of the Massachusetts Commission Against Discrimination, where she investigated complaints and drafted dispositions.

During her time at Harvard Law School, Samantha served as a board member of the Women's Law Association and was a cast member and artistic director of the HLS Parody.

Law Clerk

Gavin Carpenter is a law clerk for Proskaeur. He works as an associate for the firm's Boston offices. His areas of specialization are in labor and employment law. He is also a contributor to content produced by the firm in labor and employment issues. 


Gavin Carpenter received his law degree from Boston College Law School, J.D., 2017. He also received his undergraduate degree from Boston College in 2013. He is licensed to practice in the state of Massachusetts.