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Health Care Fund Contribution Assessment

How to Report and Pay

The HCFCA will be reported and paid in Part III of Form WHT-436, Quarterly Withholding Reconciliation & HC-1, Health Care Contributions Worksheet (pdf).

Please note: Parts I and II of Form WHT-436 are used to report wage and nonwage employer withholding. The requirements regarding the payment and reporting of employer withholding tax have not changed.

Required Forms

The employer will use three forms:

  1. Form HC-1 -Health Care Fund Contributions Assessment (pdf)
    This form is a worksheet to help the employer determine if any assessment is due for the quarter.

Retention: Employers must retain Form HC-1 for their records for three years. Form HC-1 is not required to be submitted to the Department of Taxes.

  1. Form HC-2, Declaration of Health Care Coverage (pdf)
    This form must be completed each year by uncovered employees. If an employee’s health coverage changes at any time during the year, the employee must complete and submit a new Form HC-2 to their employer.

Retention: Employers should retain Form HC-2 for their records for three years. Form HC-2 is not required to be submitted to the Department of Taxes.

  • If an employee is not covered by the employer’s plan and the employer has no HC-2 on file for them, the law requires the employee to be treated as “uncovered.”

    • This means an employer could end up paying an assessment for an employee that meets an exception simply because the employer failed to obtain an HC-2.

    • On audit, the Department is required to assess for uncovered employees with no Form HC-2 on file.

  • Employees not covered by the employer’s plan must obtain a new HC-2 every year.

  • A person who was under the age of 18 at any point during the calendar quarter is not an “employee” for the purposes of the HCFCA. This means this person is not required to complete and submit an HC-2. An employer, however, may request employees under age 18 to complete the form for their records.

  • If an employee’s health care coverage changes, the employee should complete a new Form HC-2 within a reasonable amount of time. Reporting is conducted using the last declaration on file and employers must obtain new forms annually.

  1. Form WHT-436, Quarterly Withholding Reconciliation & HC-1, Health Care Contributions Worksheet
    The employer must complete this form each quarter and enter the Health Care Contribution Assessment (calculation made on Form HC-1) in Part III. The assessment is filed and paid electronically at the same time quarterly withholding reconciliation is filed using Form WHT- 436, Quarterly Withholding Reconciliation.
  • The employer must submit Form WHT-436 with payment, if any, along with employer withholding to the Vermont Department of Taxes.
  • Employers must mark zero if they have fewer than five full-time equivalent employees over the age of 18.

Find out how the assessment is calculated and learn more about special employee situations.

Annual Statement

Although not required for tax purposes, employers should be aware that the law requires them to provide employees with an annual statement of the following:

  • the total monthly premium cost paid for any employer-sponsored 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.

For more information, contact us at (802) 828-2551 or tax.business@vermont.gov.

Health Care Fund Contribution Assessment Forms and Guidance

myVTax Instructions

Title Number Revised
myVTax Specifications for Filing VT Form WHT-436 Electronically GB-1120 2023
Vermont Department of Taxes ACH Credit Payment Guide GB-1104 2023

Tax Forms and Instructions

Form Number Instructions Title Revised
HC-1 and WHT-436 Instructions Health Care Contributions Worksheet and Quarterly Withholding Reconciliation, Child Care Contributions and Health Care Contribution 2024
HC-2 Included with form Declaration Of Health Care Coverage 2018

Fact Sheets and Guidance

Title Number Revised
Guide to the Health Care Fund Contribution Assessment GB-1158 2024
For Employers: Health Care Fund Contribution Assessment FS-1144 2024
Health Care Fund Contribution Assessment Decision Tree N/A 2017

Filing Due Dates

Employers subject to the assessment must pay it quarterly, on or before the 25th day of the calendar month succeeding the close of each quarter. This means it is due on or before:

Tax Period Due Date
January 1 - March 31 April 25
April 1 - June 30 July 25
July 1 - September 30 October 25
October 1 - December 31 January 25

Laws, Rules, and Regulations

Title Section
H.516 (Act 73) An act relating to miscellaneous tax changes H.516