The Massachusetts Department of Unemployment Assistance (DUA) has begun assessing Employer Medical Assistance Contribution (EMAC) supplemental payments for the first quarter. This post proposes a grounds for appealing DUA determinations that would serve employers well: 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.”
In a previous post, we explained the mechanics of the EMAC supplement. In general, 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. (ConnectorCare is a program of health insurance using state subsidies that provides coverage to individuals with household incomes of less than 300% of the Federal Poverty Limit.) 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.
ConnectorCare is a different matter. Under Federal law (the subsidies are, after all, Federal tax subsidies), 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.
So much for how the rules should work. What might the DUA do when confronted with the argument on appeal that employees ineligible for ConnectorCare should not trigger penalties? We suppose that the DUA could simply say, “not our problem; the Connector says the employee is subsidy eligible; we are not going to re-litigate that finding.” This would be an unfortunate result. 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, it seems only fair and logical that 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. They could ask their employees, we suppose, but we think that is a really bad idea. Where the source of the EMAC supplement makes a difference (i.e., where 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.
Although the increase in the basic EMAC contribution and the addition of the supplement may not be popular, the Baker Administration and the Legislature had to do something. The EMAC supplement is a response to the larger and more intractable problem of rising health care costs. 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 about which we offer no opinion. It does strike us, however, that where an employer offers affordable, major medical coverage, it should not be penalized where ConnectorCare is issued in error. This is a mistake not of its own making.