Many Massachusetts businesses have offered affordable care under the Affordable Care Act, but due to their employees enrolling in MassHealth or ConnectorCare, they have now received large first-quarter bills from the state of MA (some in the neighborhood of $30,000) due to below law. There is a problem – there is no way to budget as they have no way of knowing who is enrolled.
The Massachusetts Department of Unemployment Assistance (DUA) has begun assessing Employer Medical Assistance Contribution (EMAC) supplemental payments for the first quarter. Employers that offer affordable, major medical coverage to their employees should not be assessed an EMAC supplement for any full-time employee who has coverage under ConnectorCare. The Affordable Care Act (ACA) makes these employees ineligible for subsidized coverage.
Employers are for the first time rushing to appeal the EMAC supplement determinations in cases in which employers feel that the determination is faulty. Among other things, final regulations issued under the new law implementing the EMAC supplement provide employers with limited appeal rights to contest the DUA’s determination. The determination notice makes clear that appeals, which must be filed within 10 days of the receipt of the determination, are “limited to the issues cognizable under the EMAC supplement statute, G.L. c. 149, § 189A.”
A covered employer is liable for the EMAC supplement for a quarter if one or more of its employees received health insurance coverage either through MassHealth agency or through ConnectorCare for a continuous period of at least fifty-six days. An employee who qualifies for MassHealth has the right to apply or enroll without regard to the coverage his or her employer might make available.
However, ConnectorCare is different. Under Federal law, employees must meet certain criteria to qualify for subsidized coverage. They must, for example, have household income from one to four times the Federal Poverty Level (FPL) – for 2018, this range is from $12,060 for an individual and $24,600 for a family of four at 100% FPL, to $48,240 for an individual and $98,400 for a family of four at 400% FPL. Also, employees may neither be eligible for coverage through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), or other forms of public assistance, nor may they have access to affordable, minimum value coverage through an employer (including a family member’s employer).
— Employer coverage is considered “affordable” if the employee’s contribution toward the cost of self-only coverage is less than 9.56 percent of his or her household income.
— Coverage qualifies as “minimum value” if the plan is a major medical plan that is at least as generous as commercially available bronze plans – those that provide minimum creditable coverage for Massachusetts purposes.
— If the employer’s plan satisfies both of these standards, the employee and covered dependents are ineligible for subsidized coverage through an ACA exchange – here the Massachusetts Health Insurance Connector.
The Legislature made liability for EMAC supplement contingent on coverage for which the government was paying for or subsidizing. Where an employee is ineligible for a subsidy, why would there should be no penalty on the employer?
Employers faced with an EMAC supplement have no way of knowing how the assessment is apportioned as between MassHealth and ConnectorCare. Where the source of the EMAC supplement makes a difference (the employer makes an offer of affordable, minimum value coverage), the employer’s better approach is to exercise its appellate rights – i.e., appeal to the DUA.
Whether the EMAC supplement is the right approach in the case of an employer that fails to offer coverage, or that offers substandard or overpriced coverage, is a policy matter. We believe that where an employer offers affordable, major medical coverage, it should not be penalized where ConnectorCare is issued in error.