We are a national company with employees who live in Massachusetts and work in another state, and employees who live outside of Massachusetts yet work in the state. Who do we report in the FSC filing?
Massachusetts state health insurance legislation (Chapter 58 of the Acts of 2006) enacted in April of 2006 contained new obligations for Massachusetts employers. Among the provisions was the requirement for certain employers to make a "Fair Share Contribution" (FSC) to the Commonwealth Care Trust Fund if they do not make a "fair and reasonable" contribution to the health insurance costs for their employees at levels specified by regulation. The Massachusetts Division of Health Care Finance and Policy (DHCFP), an agency within the Executive Office of Health and Human Services, promulgates the regulations related to the determination of an employer's liability for FSC, including regulations defining the "Primary Test" and the "Secondary Test," which determine whether a fair and reasonable contribution has been made. The Division of Unemployment Assistance (DUA) is responsible for collection of the Fair Share Contribution. Massachusetts employers subject to M.G. L c.151A § 1 (unemployment insurance law) who employ eleven (11) or more full-time equivalent employees must file an annual Fair Share Contribution report as well as the Employer Health Insurance Responsibility Disclosure (HIRD) report.
If you were sent an FSC notice to file letter from DUA, you must file the FSC report for that filing period. These letters are sent to employers whom DUA believes could reach the threshold of eleven (11) full-time equivalents (FTE), as well as to employers whom DUA does not have adequate headcount or payroll hour information.
Also, any Massachusetts employer who has at least 22,000 payroll hours in 2007 and 2008 annual filings, and 5,500 payroll hours in 2009 Quarter 1 filing is required to file the FSC report, even if they have not been notified by DUA to do so. Non-compliance may mean potential tax assessments and/or other enforcement activities.
Filing criterion may change from filing period to filing period, so you will need to go to the website <strong>https://fsc.detma.org</strong> type in your DUA number, verify your employer information and select the appropriate period "Filing Instructions" to determine if and when you must file.
The criteria for whether you need to file the Fair Share Contribution report is based upon 11 full-time equivalents (FTEs), not 11 full-time employees. Payroll hours are used to determine the number of FTEs you have. One (1) FTE is equal to 2,000 payroll hours in annual filings, and 500 payroll hours in quarterly filings. Since your payroll hours total includes hours of full-time employees, part-time employees, seasonal employees, temporary employees etc, you could reach 11 FTEs without having 11 full-time employees.
- Go to the website <strong> <u> <u>https://fsc.detma.org</u> </u> </strong> type in your DUA number, verify your employer information and refer to appropriate period "Filing Instructions" which provide definitions and examples to help you determine your FTE count.
Our business is a temporary agency. Workers are sent to various locations. Do we have to include these workers in our Fair Share Contribution filing?
If you are required to report these workers to DUA on your quarterly Unemployment Insurance Form 1 filing, then these workers are considered your employees and must be included in your Fair Share Contribution filing.
No employer or employee may be considered seasonal until a determination is made by the Department of Workforce Development (MGL ch 151a § 24a). To learn more about the certification process, visit www.mass.gov . Type "seasonal certification" into the search box.
Any employer subject to Massachusetts Unemployment law (MGL ch 151a § 1), whether certified as seasonal by DWD or not, must file the FSC report if it meets the filing criteria.
We are a national company with employees who live in Massachusetts and work in another state, and employees who live outside of Massachusetts yet work in the state. Who do we report in the FSC filing?
First, if you have multiple DUA numbers you will need to file separately under each DUA number that meets the filing criteria.
You should report only those employees that work in Massachusetts for an employing entity that is subject to Unemployment Insurance law M.G. L c.151A § 1. Employee residence is not a consideration for FSC reporting.
How your group health plan is funded has no bearing on whether or not you need to file for the Fair Share Contribution report. Filing criterion may be found at the <strong> <u> <u>https://fsc.detma.org</u> </u> </strong> website. Type in your DUA number, verify your employer information and select "Filing Instructions" to determine if you must file. Filing criterion may change from period to period, so be sure to print and read the appropriate period instructions.
No. You must file separately for each DUA number for which you receive notification to file and/or for each DUA number that meets the filing criteria.
- 2007 and 2008 timely filing was October 1 - November 15 of the respective year. Past-due payments will be debited from the employer's account on the next banking business day for the full amount, plus interest.
- Employers liable to pay the Fair Share Contribution for filing year 2007 will have their accounts debited for the full amount, plus interest, since all payments are past due collection.
- For filing year 2008, those employers liable to pay the Fair Share Contribution were given the option to pay the full amount in a single payment, to pay semi-annually, or to pay quarterly. Payment due dates established in regulation are as follows:
- Single, Annual Payment: Due 11/15/08
- Semi-Annual Payment Schedule: 50% due on 11/15/08, 50% due on 5/15/09
- Quarterly Payment Schedule: 25% due on 11/15/08, 25% due on 2/15/09, 25% due on 5/15/09, 25% due on 6/23/09
- Commencing 2009, quarterly filings for those employers liable to pay the Fair Share Contribution are due in full on quarterly due dates. Payment due dates and timely filing periods established in regulation are as follows:
- Payment Due Date Timely Filing Period
- payment due on 2/15/09 1/1/09 - 2/15/09
- payment due on 5/15/09 4/1/09 - 5/15/09
- payment due on 8/15/09 7/1/09 - 8/15/09
- payment due on 11/15/09 10/1/09 - 11/15/09
- In order to encourage employers to file early, DUA will not debit the bank account of any liable employer for any timely payment until the due date. Past-due payments will be debited from the employer's account on the next banking business day for the full amount, plus interest.
What happens when an employer fails to file timely, after being notified by DUA that they must file?
DUA may first send a reminder notice to the employer to file. If non-filing persists, DUA will estimate a Fair Share Contribution due amount and issue a bill to the employer. Since many employers who are required to complete an FSC filing may not owe the contribution, and/or may owe less than the assessed contribution amount estimated by DUA, it is in the employer's best interest to file with DUA timely.
The law governing the FSC program (MGL Chapter 149. Section 188(d), as amended) requires DUA to assess penalties on employers who fail to pay required contributions timely. Regulations have defined the penalty as interest, set at 12% per annum on unpaid contribution amounts. DUA has no authority to waive interest for late payers.
Continued failure of the employer to file and/or pay the required contribution may result in legal enforcement actions by DUA, such as receipt of a court judgment against the employer. Typical legal collection methods include bank levies and property liens to employers who persist in non-payment, and/or fail to meet the requirements of a payment plan agreement with DUA.
I want my Fair Share Contribution notifications to be mailed to a different address/department than the address used for UI/UHI mailings. Is this possible?
Yes. You will have an opportunity to change/update your FSC address at any time and as often as necessary on the FSC website. Go to <strong>https://fsc.detma.org</strong> and type in your DUA number, verify your employer information, select a filing period, continue past the re-entry number page and update your FSC address on the Employer Address page.
Once you certify your FSC filing and have been determined liable, you may submit an appeal in writing to the Fair Share Contribution Unit, 19 Staniford St, Boston, MA 02114. The appeal must be postmarked within 10 days of the certification date of your filing, or 30 days with good cause. The issues that can be addressed through an appeal are whether an employer is liable for the Fair Share Contribution and, if so, whether the amount of the contribution was correctly determined.
A filing that is not certified cannot be appealed.
We offer a Section 125 Cafeteria Plan. Is that the same as offering an employer-sponsored group health plan?
Cafeteria plans are commonly offered as tax conduits (allowing employees to pay for health insurance with pretax dollars) and are separate from the underlying benefit plans that actually provide the benefits. Check your cafeteria plan document.
To learn more about Section 125 Cafeteria Plans, visit The Connector website at: www.mahealthconnector.org
Can our FSC filings be audited?
Yes, all FSC reports filed by the employer are subject to audit and/or validation by DUA and/or other agencies of the Commonwealth.
What is the Difference between the Fair Share Contribution Report and the Unemployment Health Insurance Report Filed with DUA?
Do Not Confuse the Fair Share Contribution with the Unemployment Health Insurance Contribution in Effect Since 1990.
DUA has been administering the Unemployment Health Insurance (UHI) Program since 1990, which requires a contribution from certain employers who have an average of at least six employees in a quarter. The UHI contribution is based on one of three tax rates, depending upon the length of time an employer has been in business. The assigned UHI tax rate is applied to the first $14,000 in wages paid to each employee during the calendar year. The UHI contribution funds the Medical Security Trust Fund, and enables DUA to provide health coverage to qualified and income-eligible Unemployment Insurance (UI) claimants while they are unemployed and collecting UI benefits. All employers in business for two years or more are required to file with DUA for the first quarter each year between April 1 and April 30; and to file quarterly for any quarter in which they average at least six employees.
Conversely, potential liability for the Fair Share Contribution applies to employers who employ 11 or more full-time equivalent (FTE) employees in an applicable base period. Those employers who do not make a "fair and reasonable contribution" to their employees' health insurance as defined in Division of Health Care Finance and Policy regulation (reference 114.5 CMR 16.00 - 16.05) are required to pay a per-employee FSC. Assessment of liability for payment of FSC is contingent upon self-reported data filed by the employer in a Primary and a Secondary test.
Legal and Regulatory Citations
All regulations related to the Fair Share Contribution program may be accessed from the DUAwebsite www.mass.gov/fairshare.
DUA's regulations, 430 CMR 15.01 - 15.11, define certain elements of the FSC liability decision as well as filing and payment provisions.
The MA Division of Health Care Finance & Policy, an agency within the Executive Office of Health and Human Services, promulgated regulations related to determination of an employer's liability for the Fair Share Contribution. Among other provisions, these regulations define the "Primary Test" and the "Secondary Test" for a fair and reasonable contribution to an employee's health insurance coverage.
In addition, the MA Division of Health Care Finance & Policy has promulgated regulations (114.5 CMR 18.00) establishing which employers must file the HIRD report (adopting the same definition of eleven (11) or more full-time equivalent employees as DUA does in its regulations), and stipulating the information to be contained in the HIRD report.
The Commonwealth Health Insurance Connector Authority has promulgated regulations (956 CMR 4.00) pertaining to the responsibility of certain employers to establish and maintain a Section 125 (IRS Code) Cafeteria Plan. These regulations may be accessed via the Connector's website: www.mass.gov/connector.
Multi-Employer Plans Including Those Related to Collective Bargaining Agreements
Multi-Employer Health Benefit Plans, are plans to which more than one employer is required to contribute and which are maintained pursuant to one or more collective bargaining agreements. To complete the primary test in the DUA application, the Division of Health Care Finance and Policy has ruled that an Employer that makes a contribution to a Multi-Employer Health Benefit Plan on behalf of a full-time employee may include that full-time employee in the number of employees enrolled in the health plan. Also, for purposes of completing the primary test, an employer under contract with the federal government that makes a contribution to a full-time employee's benefits in accordance with federal requirements may include that employee in the number of employees enrolled in the health plan.
What if an employer has purchased a Massachusetts business, undergone a business transfer and/or organizational change during the applicable base period?
Companies that take over part or all of another UI subject employer during the applicable base period are responsible for including the predecessor's payroll, employment, and health insurance data when they file for FSC. The 2007 and 2008 base period was 10/1-9/30 of the respective year. 2009 applicable quarterly reporting periods are 10/1/08-12/31/08; 1/1/09-3/31/09; 4/1/09-06/30/09 and 7/1/09-9/30/09.
First, by law, the predecessor and successor must have reported this information to the DUA for UI purposes - to receive a proper UI determination and the possible issuance of a new DUA number(s). Then, the FSC filing can be completed under the appropriate DUA number, and with the correct FSC filing data included. Failure to take the first step in notifying DUA of a business transfer may not only result in retroactive changes to their UI accounts and UI rates, but could also result in improper FSC filing.
Among the types of business transfers and organizational changes that must be reported to DUA are if:
- You acquired all or part of another business or organization operating in MA
- You were part of a merger with (or consolidation of) a business operating in MA
- You changed your Federal Identification Number
- You have had a relationship with or are a "spin-off" of a company subject to MA UI law
- You changed your organizational structure, including, but not limited to, changes from a sole proprietorship and/or partnership to a corporation or LLC, LLP, etc., or vice versa
You must notify DUA of any such a business transfer or organizational change.
To start this process, please download the "Employer Status Report," Form 1110, from www.mass.gov/dua . After a UI determination is made related to the business transfer, you will be notified by DUA if you are required to file for FSC.
By DUA regulation, the client company is the "employer," not a leasing company who supplies workers to the client and/or handles payroll, tax, and/or other administrative functions for the client company.
This means that the FSC filing must be completed under the client company's DUA number, and must reflect the payroll, health insurance, and employment data related specifically to the client company.
Can an employer or a third party agent submit "multiple business filings" in bulk (e.g., by disk, cartridge tape, FTP file, etc.)?
While the employer may choose to secure the services of a third party to complete the on-line FSC filing on their behalf, the FSC filing must be done individually, in this on-line filing mode, on an employer-by-employer basis. Each filing must reflect the payroll, health insurance, and employment data related to a specific DUA number.
If an employer does not have access to a personal computer, there are locations where free access to a PC can be obtained. These include the 32 One-stop Career Centers across the Commonwealth as well as most public libraries. Employers may also contact the FSC office at (617)-626-6080, option 3 to schedule use of a computer in the Employer Assistance Center located at 19 Staniford Street, Floor 5, Boston, MA 02114.
The employer filing must be completed on-line at <strong>https://fsc.detma.org</strong> in accordance with dates established in regulation. Specific filing details may be obtained at this website. Type in your DUA number, verify your employer information, select the appropriate filing period, and click on "Filing Instructions." Print and read these instructions prior to filing. The filing process will also be the vehicle for initiating the payment process if the employer is determined liable for payment. Filing will be on an individual employer-by-employer basis. Employers who use payroll services may wish to obtain payroll information from their payroll services, such as the number of payroll hours for particular employees during the applicable base period. All data filed by the employer is subject to audit and/or validation by DUA and/or other agencies of the Commonwealth.
The majority of questions have remained the same. Notable changes are listed below:
- Last year's manual worksheet has been incorporated into the Primary Test
- You will be asked for the insurer name and group id of the health insurance plan that satisfied your stated contribution percentage in the Secondary Test
- A question on waiting period has been added to the HIRD filing
- You will have a single re-entry number for your in-process filing
- Due dates for the four installment payment schedule for 2008 are: 11/15/08, 2/15/09, 5/15/09, 6/30/09 6/23/09
- FSC liability is based upon an employer's circumstances each quarter, rather than on a year as a whole.
- Any employer liable to pay a fair share contribution will be required to pay in full on quarterly due dates.
- Definition of "full-time employee" is the same in Primary and Secondary Test quarterly filings.
- Employers will count hours worked for all employees who worked at least 150 payroll hours during the twelve-month period ending with the last day of the applicable quarterly reporting period.
- Letter from DUA regarding your 2009 quarterly filing
Given statutory requirements mandating at least 50% contributions to their full-time employees' health insurance, 32-B(32-A) certified cities/towns have not to date had to file full fair share data like other businesses. Recognizing that fact, we are not requiring them to file for FSC in 2009 Quarter 1 -- to give them time to prepare to do a first full Fair Share filing in early 2010, which will include certifying compliance for each quarter of FSC 2009. Additionally, the test in effect for FSC 2009 Quarter 1 (the "or " test) sets a standard that these 32-B(32-A) certified cities and towns are already surpassing as a result of their irrevocable adoption of 32-B/(32-A) and its required minimum 50% health benefit contribution rate.
I'm trying to file on-line and my filing period does not appear in the drop-down box selection on the Filing Period page. How can I file?
One reason could be the period for which you are trying to file may not be over. For example, if you are trying to file for the applicable base period 10/01/08-12/31/08, you will not be able to file until 1/1/09 because filing questions require information about your business up through and including 12/31/08, the last day of the quarter.
Also, make sure to look at both the "new/inprogress" filings and "completed" filings on this same Filing Period page to see if your filing period is listed in either of these selections.
ACH transactions are transmitted electronically between financial institutions through data transmission. ACH provides faster processing than paper checks by eliminating physical handling. ACH provides more economical processing than credit cards, which may carry convenience fees and finance charges.
By entering the required banking information, you authorize the Commonwealth of Massachusetts' financial institution (in this case, Comerica) to debit your checking or savings account for the amount you specify, for a single occurrence.
You provide the name on the account, indication of personal or business account type, indication of checking or savings, bank routing number, and account number.
Your bank routing number and bank account number can be found on the bottom of your check. Bank routing numbers are always 9 digits long. Account numbers may be up to 17 digits long - there is no specific number of characters for a bank account number. These numbers may appear in different order on your check. Some financial institutions list the routing number first, while other financial institutions list the account number first. We do not need your check number.
Here is an example of where you can find this information on your checks:
You may need to check with your financial institution to make sure that the account is "ACH enabled" or that "debit blocking" is removed so that the Commonwealth will be permitted to debit your checking account.
The Commonwealth's electronic payment application is hosted by EDS. The EDS*Pay web site is continually monitored for intrusion. Information regarding the transaction is stored in a secure environment behind multiple firewalls and through a dedicated EDS circuit. The consumer's bank account number is encrypted when stored using AES 256-bit encryption. EDS also utilizes a secure transmission protocol (VeriSign's Secure Sockets Layer (SSL)) with 128 byte encryption. SSL is a commonly used protocol for managing the security of an interactive web session on the internet. If the web page has an address that begins with https:// rather than http:// then the page is protected by SSL.
If there are insufficient funds in your account, this item will be processed the same way as a bounced check -- the Commonwealth will initiate collections proceedings to recover these funds from you. Your financial institution will notify you and may charge a returned check fee.