The Vermont Department of Taxes has updated its fact sheet for employers on the Health Care Fund Contribution (HCC) to include information about how to determine and report the assessment on Form WHT-436, Quarterly Withholding Reconciliation. (For Employers: Health Care Fund Contribution Assessment, Publication FS-1144, revised August 2019.)

Of significant mention, the Department clarifies that:

• If the employer does not offer health coverage for which it pays some part of the expense, all hours worked by its employees must be reported as uncovered, without regard for whether the employees secure coverage anywhere else.
• Giving cash bonuses to employees to purchase their own health coverage is not considered as offering a health plan.

Effective March 31, 2019 and through December 31, 2019, the HCC is $167.02 (up from $163.20 for the same period in 2018) per uncovered full-time equivalent (FTE) employee above the four FTE exemptions.

For more information, see the HCC guide.

Background

Starting in 2017, Vermont employers that have more than four 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 the HCC on a quarterly basis. The first four uncovered employees are not subject to the assessment.

All businesses having HCC contributions must complete the WHT-436 each quarter along with the payment of the HCC and file it with the Department by the 25th of the month following the close of the quarter.

In addition to the WHT-436, the following are also required:

• Form HC-1, Health Care Fund Contributions Assessment. This is a worksheet to help employers determine any assessment liability for the quarter. Employers should not submit this form to the Department, but it should be retained in the employer's records for three years.
• Form HC-2, Declaration of Health Care Coverage. Employees not covered by the employer's health insurance planmust complete Form HC-2, and employers, may at their option request that covered employees also complete this form. HC-2 must be completed every year and if an employee's health coverage changes during the year, the employee must complete a new HC-2 at that time. Employers should not submit this form to the Department, but it must be retained in the employer's records for three years.
• Employee annual statement. 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

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

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