Information has released information on how employers will report and pay the Health Care Contribution to the Vermont Department of Taxes beginning with the fourth quarter 2017 return, due January 25, 2018. (Press release, December 11, 2017.)

As we reported previously, under HB 516 (Act 73), enacted earlier this year, effective January 1, 2018, the administration of the quarterly employer health care contribution is moved from the Vermont Department of Labor to the Vermont Department of Taxes, effective with the filing of the fourth quarter 2017 withholding tax return, by January 25, 2018. (EY Payroll NewsFlash Vol. 18, #142, 8-18-2017)

Employers should take note that two big changes resulting from the move is that (1) the due dates for the health care contribution are changed to the 25th of the month following the end of the quarter, instead of the last day of the month, and (2) the health care contribution will be reported on, and remitted with, the quarterly withholding tax return (in new Part III of Form WHT-436). The change in the filing due date was implemented to sync to the withholding due date to eliminate the need to file an additional form. No changes were made in who is required to pay the health care assessment.

As a result, the fourth quarter 2017 health care contribution payment is due by January 25, 2018, rather than January 31, 2018.

Employers and employees use the following three forms to for reporting:

1. WHT-436, Quarterly Withholding Reconciliation

2. All businesses with withholding accounts must complete this form each quarter and enter the Health Care Contribution assessment (calculation made on form HC-1). Submit Form WHT-436 with payment of the assessment, if any, along with your employer withholding to the Department of Taxes by the 25th of the month following the end of the quarter. This form can be submitted online at myVTax or on paper. If reporting on paper, be sure to use the updated form.

3. Form HC-1, Health Care Fund Contributions Assessment

4. This form is a worksheet to help employers determine any assessment liability for the quarter. Employers should not submit this form to the Department of Taxes, but should instead retain this form in their records for three years.

5. Form HC-2, Declaration of Health Care Coverage

6. All employees must complete this form, whether covered or uncovered. The form must be completed every year. If the employee's health coverage changes during the year, however, the employee must complete a new HC-2 at that time. Do not submit this form to the Department of Taxes. Retain this form for your records for three years.

More information is available is available on the Department of Taxes website. Employers with questions may call +1 802 828 2551 or send an email to tax.business@vermont.gov.

Details on the health care contribution

Vermont employers that have more than four full-time equivalent (FTE) employees (age 18 or older, working 30 or more hours) are required to offer health insurance coverage and employers are required to pay a portion of the cost. Employers that do not offer health insurance must pay a health care contribution on a quarterly basis. The first four uncovered employees are not subject to the assessment.

For more information, see the health care contribution guide or fact sheet.

For calendar year 2017, the health care contribution is $158.77 per uncovered FTE above the four FTE exemptions.

Annual statement to employees is required

Although not tax-related, employers are also required to provide employees with an annual statement of the following:

-- the total monthly premium cost paid for any employer-sponsored healthcare plan
-- the employer's share of the monthly premium
-- the employee's share of the monthly premium
-- any amount the employer contributes toward the employee's cost-sharing requirement or other out-of-pocket expense.

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EY Payroll Newsflash