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The Massachusetts Department of Unemployment Assistance confirms that the increase to the Employer Medical Assistance Contribution (EMAC) rates and the EMAC Supplement, both effective for calendar years 2018–2019 have expired for 2020. The EMAC rate for employers that paid at 0.51% for 2019 is 0.34% for 2020.

The taxable wage base remains at $15,000. (Department website; email response to inquiry.)

2017 legislation increased the EMAC for 2018–2019

As we reported, 2017 HB 3822 increased the EMAC for two years (2018–2019) and added a second tier tax to partially fund the $600 million MassHealth shortfall. These added taxes were offset by a two-year decrease in employer state unemployment insurance (SUI) rates.The changes were part of a proposed compromiseplan sent by the governor and the business community to the state legislature to replace the previously proposed $2,000 per-employer fair-share contribution. (EY Payroll Newsflashes Vol. 18, #113, 6-30-2017, #143, 8-21-2017, #185, 11-2-2017 and #191, 11-10-2017; and Vol. 19, #025, 1-28-2018.)

In early 2019, a coalition of businesses, led by Associated Industries of Massachusetts (AIM), asked the legislature to repeal (HB 1647)or, at minimum, allow the EMAC increase and supplement to expire at the end of 2019 as provided for by law. There had been some discussion of extending the increase at the time of FY 2020 budget negotiations.(EY Payroll Newsflash Vol. 20, #069, 6-4-2019.)

According to AIM, the state collected millions more than originally estimated in 2018. Massachusetts businesses were anticipated, by the end of 2019, to pay 30% more than the $400 million intended under the 2017 legislation. The repeal legislation did not pass; but the FY 2020 budget did not include an extension to the EMAC increases. (AIM blog.)

2020 EMAC rates

According to the Department, the 2020 EMAC rates are assigned as follows:

• New employers. New employers subject to unemployment contributions for their first time are exempt for the first three years
• Year 4. Employers in their fourth year of being subject to EMAC pay at a rate of 0.12%(down from 0.18% for 2018–2019)
• Year 5. Employers in their fifth year of being subject to EMAC pay at a rate of 0.24% (down from 0.36% for 2018–2019)
• Year 6 and over. Employers in their sixth year or more of being subject to EMAC pay at a rate of 0.34% (down from 0.51% for 2018–2019)

Employers of six or more employees pay EMAC contributions on the first $15,000 of each employee's wages paid during the calendar year.Employers are exempt from the EMAC in a quarter in which they have fewer than six employees and/or are in their first three years of being "newly subject" under the Massachusetts unemployment insurance law.

The second tier EMAC that was in effect for 2018 and 2019 is no longer in effect as of 2020. The EMAC Supplement was created to require applicable employers to pay an additional 5% (up to $750) on an adult employee's taxable wages if the nondisabled employee received health insurance coverage through the Massachusetts Division of Medical Assistance (MassHealth) or subsidized insurance through the Massachusetts Health Insurance Connector Authority (ConnectorCare), rather than through the employer's plan.

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EY Payroll News Flash