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Public Policy

Policy Review: Senate Employer Assessment Another Step in Right Direction

This week, the Senate Committee on Ways and Means released their FY 2018 budget plan which, building off of both the Governor and House budgets, includes two alternative methods for the administration to assess employers to help pay for the rising cost of MassHealth in the state budget.

Importantly, the Senate gives the governor’s administration, specifically the Secretary of Administration and Finance, the option to raise revenue. The Secretary may choose between increasing the existing Employer Medical Assistance Contribution (EMAC) for virtually all employers/ees, or create a separate employer health care assessment. The employer health care assessment would apply to employers who do not meet a contribution threshold and/or do not meet a minimum rate of employees participating in their employer sponsored coverage. Worth noting, the Senate proposal does not require the Secretary to implement either option.

In most other ways, the Senate budget builds off of the House’s framework on the employer health care assessment and makes an effort to address additional employer concerns.

Key provisions in the Senate plan include:

  • A $180M cap on revenue generated through the assessment in FY18—similar to what the House projected.  In the Governor’s original proposal, the administration sought to raise $300M in revenue in the first fiscal year the assessment was in place. A revenue cap will help ensure that, rather than filling a budget gap, the assessment would be tied to the issue it is designed to address: the cost of full-time employees who are enrolled in the state’s MassHealth program rather than employer-sponsored insurance.
  • A sunset date of two years for either the EMAC increase or the employer contribution program.  The House also included a sunset of two years in their proposal.  This provision is crucial as this administration may limit the assessment to those employers shifting their employees onto MassHealth, future administrations may expand it, especially if the state loses significant federal funding for its Medicaid program.
  • The ability for certain non-profit organizations to be exempt from the assessment. 
  • Employer assessment would only apply to employers with 25 or more FTEs, while an increase in the EMAC would apply to employers with 6 or more employees.
  • Under the Senate plan, like the House version, the administration would have the authority to design the assessment. It also lists factors that must be considered when developing the assessment, including, among other items: employer contributions toward health insurance; number of full- and part-time employees; and access to alternative coverage, such as through a spouse’s plan. The Senate also gives the administration the power, with considerations, to create the minimum qualified offer, and minimum uptake rate for the employer contribution program.

The sunset provision and limiting how broadly the assessment may be applied were critical items to include, and the Chamber has expressed its appreciation to Senate staff.  The discussion with the administration, legislators, and employers will continue and the Chamber will keep working to emphasize the need to contain MassHealth enrollment and spending growth, address the issue of employers shifting employees onto MassHealth, and protect those employers who provide their employees with benefits.  

This debate has highlighted the need for Massachusetts to work towards systemic solutions that address the rising costs of both public and private health care market. This includes containing the rising enrollment in and costs of MassHealth, ensuring small employers have affordable health insurance options, and encouraging residents to improve their understanding of the costs of health care.  

Download the Chamber's analysis here