Our colleagues on the Employment Matters blog have been following Massachusetts’ efforts to make up a funding shortfall in the Commonwealth’s Medicaid program and its Children’s Health Insurance Program (CHIP). Back in May, they blogged on the two options introduced by the Senate to offset these rising costs: (1) a “play-or-pay” option that would impose a per employee assessment on companies that do not offer their workers’ health plans, or (2) an across the board increase in the Employer Medical Assistance Contribution (or “EMAC”).

Last week, they provided an update on the Commonwealth’s effort. On August 1, Massachusetts Governor Charlie Baker signed into law H. 3822, “An Act Further Regulating Employer Contributions to Health Care” (the “Act”). This Act (i) increases the Employer Medical Assistance Contribution (“EMAC”) from an annual maximum fee of $51 per employee to $77 per employee; and (ii) imposes a penalty on employers of up to $750 for each non-disabled worker who receives health insurance coverage through MassHealth or the Massachusetts Health Connector (i.e., the Commonwealth’s Affordable Care Act marketplace).

Read their full update here.

Our colleagues on the Employment Matters blog recently analyzed a budget proposal by the Massachusetts Senate that would authorize the Governor to collect additional funds from employers to offset increasing MassHealth costs.  MassHealth, Massachusetts’s Medicaid program, offers low-cost, benefit rich coverage to low-income individuals.   Eligible individuals sometimes forgo employer coverage in lieu of MassHealth coverage, a trend that is unsustainable for the Commonwealth.

In Governor Baker’s fiscal year 2018 budget, he called on Massachusetts employers to help pay for the increasing Medicaid costs.  To support this initiative, the Senate recently introduced a proposal that would allow the Governor to select from two options to offset these rising costs: (1) a “play-or-pay” option that would impose a per employee assessment on companies that do not offer their workers health plans, or (2) an across the board increase in the Employer Medical Assistance Contribution (or “EMAC”).  The Employment Matters post analyzes how the increase in the EMAC may be more administratively feasible for the Commonwealth, while the “pay-or-play” option is potentially preempted by the Employee Retirement Income Security Act of 1974 (ERISA).

Check out their full analysis here.