As the 2017-2018 Massachusetts legislative session reaches a midpoint, there are two new laws and two pending bills that every business owner should be aware of.
H.3822 – An Act Further Regulating Employer Contributions to Health Care
In August, Governor Charlie Baker signed into law H.3822 – An Act Further Regulating Employer Contributions to Health Care, which addresses the Employer Medical Assistance Contribution (EMAC).
EMAC was created in 2014 after repeal of the “fair share” employer contribution. Since then, employers with six or more workers paid 0.34% of wages up to $15,000, which would be a maximum of $51. For 2018 and 2019 that charge will increase to 0.51% for a maximum of $77 per year. In addition, the new law also imposes a penalty of $750 for each non-disabled worker who receives coverage through Mass Health or the Massachusetts Health Connector.
The reason for these increases? Health insurance subsidized by the Commonwealth has seen a steep rise in enrollment in the last few years. Legislators hope these increases will encourage employers and their workers to adopt employer-sponsored insurance coverage.
H.4008 – An Act Making Appropriations For The Fiscal Year 2017 To Provide For Supplementing Certain Existing Appropriations And For Certain Other Activities And Projects
This bill includes a provision that requires employers to sign a Health Insurance Responsibility Disclosure (HIRD) form annually. The purpose would be to report whether or not health insurance is offered at the workplace and information about that insurance. Ultimately, the HIRD will be used to collect data needed to properly determine the EMAC assessment. This summary found on the Pentra website is an excellent resource.
H.2172 – An Act Establishing A Paid Family And Medical Leave Insurance Program
Pending bill H.2172, An Act Establishing A Paid Family And Medical Leave Insurance Program, may have been inspired by laws passed in several other states (most recently in New York) to address the need of those who need a better safety net.
The bill, sponsored by Representative Kenneth Gordon (D-Bedford), is designed to allow for a higher percentage of benefits to be paid to lower paid workers. It is the least onerous on the business community of the three options currently under consideration.
- The Senate version is markedly different from the House version in that it calls for steep increases in costs and benefits over the next three years.
- The final option is a ballot initiative offered by Raise Up Massachusetts. It is likely that the ballot initiative will not appear on the November 2018 ballot if agreement can be reached at the statehouse.
While it is too early to tell, I feel that the House version, in some amended form, has the best chance. Look for more on this as 2018 unfolds.
H.3159 – An Act Relative To The Recognition And Registration Of Professional Employer Organizations operating in the Commonwealth of Massachusetts
And last but certainly not least is H.3159 – An Act Relative To The Recognition And Registration Of Professional Employer Organizations operating in the Commonwealth of Massachusetts. It is identical to Senate Bill S.3159, and a bill those of us in the Professional Employer Organization (PEO) industry have championed for some time.
Each year, more and more small businesses in the Commonwealth are turning to PEOs who provide comprehensive Human Resource (HR) solutions for small and mid-size businesses. Payroll, benefits, HR, tax administration, and regulatory compliance are some of the many services PEOs provide to growing businesses throughout the country.
Here in Massachusetts, it is estimated that more than 40,000 employees work for businesses that have contracted with a PEO. Genesis has been serving the small business community here since 1991, and we feel strongly that the bills will move through the House and Senate and will likely become law in 2018. For PEOs and small business community supported by this bill, we can only hope!
During 2018, we hope to provide an update as changes develop or new bills are considered on Beacon Hill.