What is the Employer Medical Assistance Contribution (EMAC) in Massachusetts?

Are you intended to run a business in Massachusetts? Business is not only about earning money for the company and hiring so many employees. As the company owner, you also have responsibility for your employees. This will make you stay on top of the business world because your employees are happy to work with you. In this case, one of the most important things to consider is to give health insurance to your employees; apart from having Business Insurance for the company. For those who are running a business in Massachusetts, they may subject to pay Employer Medical Assistance Contribution. Anyway, let us find out all about EMAC for your information.

About EMAC

EMAC is basically a kind of tax in the form of contribution that a business owner has to pay annually. However, this EMAC may only be applied to companies in Massachusetts and there are also some conditions that require your company to pay the EMAC. The first condition is that your company has been running for at least 2 years. Secondly, you hire or have more than 5 workers or employees.

The EMAC rate must be paid annually based on the workers’ wages percentage. In this case, you have to report your EMAC tax liability to DUA (Department of Unemployment Assistance).  The EMAC tax will be used to help offset the Massachusetts health insurance program. EMAC has no expectation whether you provide sponsored health insurance for your workers, you have to pay the EMAC. Somehow, you need to report your company information to DUA, so they can ensure that your company is subject to pay EMAC tax. Then, DUA will give notification to you about the EMAC rate that you must pay. Meanwhile, it is not necessary to report your company to DUA if you do not have more than 5 workers or when your company is still new.

EMAC Rates

How much do you must pay EMAC? The determination of the EMAC Rate also depends on the company situation and condition. In this case, the government of Massachusetts relies on the tiered system to decrease the EMAC rate for a new employer. Meanwhile, the EMAC rate is taken from the percentage of your workers’ wages of the first $15000. You do not need to pay EMAC tax on your employee’s wages after they earn $15000.

The current 2018-2018 EMAC rates are determined based on the duration of the company. The year 1, 2, and 3, your company exempt from the EMAC and no need to pay tax. In year 4, the contribution rate is as much as 0.18% with maximum EMAC liability per employee is $27. Meanwhile, the contribution rate for the year 5 is as much as 0.36% with maximum EMAC liability per employee is $54.00. Then, the contribution rate for the year 6 or more is as much as 0.51% with maximum EMAC liability per employee is $76.50. So, when you are running your business for more than 6 years, you will pay EMAC at the same rate as much as 0.51%.