How the Assessment Is Calculated

The assessment is paid for every uncovered full-time equivalent employee. To find out how many uncovered full-time equivalent employees an employer has, an employer must do the following:

  • Divide the total hours worked by all uncovered employees during a quarter by 520. No matter how many hours are worked by an employee in a quarter, no more than 520 hours can be assessed for one individual employee.
  • Round down to the nearest whole number and then subtract 4. The reason 4 is subtracted is because the first four uncovered employees are exempt for all employers.
  • The resulting number is the number of uncovered employees for which the employer must pay the assessment.
  • Multiply the number of uncovered employees by the rate. The resulting number is the contribution the employer must pay to the Health Care Fund.

The HC-1 worksheet will walk employers through this calculation, both on the online form and on the paper form.

Please note: Note: It is illegal to deduct any HCFC assessment paid from an employee’s pay.

First Four Uncovered FTEs Are Exempt

The first four uncovered employees are not subject to the assessment. This exception is incorporated into the calculation on the HC-1 so employers using that form do not need to do anything extra to make use of this exception.

  • This means an employer with four or fewer full-time equivalent (FTE) employees will not have to pay any assessment, although the employer must still file a zero return.
  • Four FTEs equal 2,080 hours worked in the quarter. Note: it is possible that the 2,080 or fewer hours could be worked by more than four part-time individuals.
  • Employers must enter zero if they have fewer than five employees (i.e., 2,080 or less hours worked). Leaving the line blank on the WHT-436 could result in an assessment liability.
  • Record keeping is only required if an employer has more than four FTEs.

“Hours Worked” Tracks With When Wages are Paid

“Hours worked” should track with when wages are paid whenever possible. This is so employers are not burdened with a new reporting requirement. Employers need only track when wages are paid to comply with the HCFCA statute.

Employers should note, however, that they are never required to report non-work hours, such as sick leave or vacation, when determining hours worked.

The Rate for the Assessment

The rate for the assessment for each uncovered employee changes annually. It is adjusted each year to equal any change in the premiums for the “second lowest-cost silver-level plan in the Vermont Health Benefit Exchange.”

  • In other words, the assessment changes every year (almost certainly upward because it follows insurance costs), and its rate tracks the cost of one of the relatively inexpensive plans on the Exchange.
  • Every year, the rate will be updated and made available on our website and on the HC-1.

Uncovered Employees

 

Seasonal and Part-time Employees

 

Special Situations

Contact Us

Commissioner Kaj Samsom
133 State Street | Montpelier, VT 05633
(802) 828-2505

Taxpayer Assistance Window
Office Hours: 7:45 a.m. - 4:30 p.m. Monday - Friday

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