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Common member questions
These questions and answers were designed to help you resolve common member issues quickly.
Reimbursement and reserve accounts
- How does the reimbursement process work?
Each member builds its own reserve account to pay for future claims. The Trust reimburses the state for actual claims with money from this account.
- How does the Trust calculate how much each member deposits into its reserve account?
The experience rating process used by the Trust has been developed and refined over the years to reflect the experience of each member, allowing for maximum control of costs through controlling claims.
The calculated deposit includes amounts for estimated claims and operating expenses as well as an amount calculated to build the member's reserve account to the targeted goal over 10 years. Since reimbursing employers in most states have no other reason to calculate taxable payroll for unemployment purposes, we base our calculations on gross payroll.
We also bill for deposits in equal quarterly amounts, instead of billing for a larger deposit in the first quarter or two of the year. To stabilize member deposits and simplify the member accounting process, we calculate a net annual deposit, including an offset for member reserve account investment income.
- When should we make payments?
We bill you quarterly each year. The amount is based on your claims history and the size of your organization, and is set to provide adequate funds for your current claims and to build reserves to cover future payments. If you expect increased claims for any reason, you should contact us to discuss adjusting your deposits.
- We received a bill from the state for reimbursement of benefits paid. What should we do?
Do not pay the state. Contact the Trust administrator immediately. We will ask you to fax us a copy of the bill at (800) 449-8563 so that we can make a timely payment to the state and correct any situation preventing normal processing. The state usually sends these bills directly to your claims management team, who then sends approved bills to us for payment.
- What is the Trust's reserving policy?
Each member has a reserve account. Members' quarterly deposits and investment income are added to their own reserve account, and their benefit claims and expenses are paid from their reserve account. The balance in this account is built up over a period of ten years to equal to a percentage of gross payroll. This level is established to provide stability of annual deposit amounts for improved budgetary planning while limiting the size of the reserve to each member's actual risk.
The risk, as mentioned elsewhere, is kept at a very low level by our unique stop loss coverage. The reserve account target does not fluctuate with changing patterns of claims activity, and no other member funds are retained for estimated claims. Each participating organization owns all the funds in its interest-bearing reserve account.
- What if our reserve account balance isn't enough to cover bills from the state for reimbursement?
The liability for payment of benefit charges up to the level of stop loss attachment is solely the obligation of each member. The Trust acts as an agent in meeting this obligation, establishing deposit reserves based on the historic claims data of each member. Charges in excess of the deposit reserve remain the obligation of the member.
- What types of reports can we expect to receive regarding our activity with the Trust?
Clear reports are provided to members to help them understand their account activity and their claims experience. For example, in addition to providing a 501(c) Agencies Trust annual report, we send our members an annual report of the activity in their individual reserve account, the components of the new experience-rated calculation of their deposit, and a projection of next year's activity. We encourage questions and discussions that help us work together to control claims and lower costs.
- When can we get a reserve account activity statement?
The Trust operates on a calendar year, so you will receive your activity statement after the end of the calendar year. You can also contact the Trust administrator at any time for a statement covering any period you or your auditors require.
- Who do we call to get information about our reserve account?
Contact the Trust administrator at (800) 442-4867.
State procedures
- We received an unemployment claim notice from the state. What should we do?
Fax the notice to your claims manager. Always send claim notices to the claims management team even if the notices are for claims that you do not want to contest or that you feel are non-contestable. All unemployment claims have deadlines, so sending notices immediately is important.
You should also send the claims management team any other unemployment-related documents you receive, including initial, additional, or out-of-state claims; charge-back notices; determinations or rulings; hearing notices; and decisions. In some cases, the claims management team will have already received copies from the state, but it's better that they get redundant copies than none at all.
- Now that we have joined the Trust, do we still file quarterly wage reports with the state?
You still need to file these reports with the state, but you will no longer pay unemployment taxes. Be sure to send a copy of the quarterly wage report to the Trust administrator. To help you remember to send this report, we mail reminders to all members.
- We received a notice from the state that the amount of our security deposit has changed. What should we do?
You should notify the Trust administrator of all requests for security and forward any notices of changes in the amounts or expiration dates of bonds. Many states require a security deposit as assurance of payment from reimbursing employers. The amount varies by state but is typically based on a percentage of payroll.
The most common type of assurance is a surety bond, but some states may request a cash deposit or prepayment of estimated claims. If your state requires a security deposit, we will obtain the surety bond for you and deduct the annual fees from your reserve account.
HR issues
- We may have to consider layoffs at our organization. Is there anything we should do in advance to reduce the unemployment costs resulting from the layoffs?
Contact the claims management team at (800) 955-4351, ext. 7, as soon as possible to begin planning. Taking steps six months or more in advance can be helpful in reducing costs.
- We are considering a merger with another organization. How would this affect our participation in the Trust?
The answer depends on which organization will be the surviving organization and whether that organization has chosen the reimbursement method. Contact the Trust administrator to discuss your options. You may also want the claims management team to help you review the other organization's unemployment history.
- Who do I call to get help with a personnel issue?
Call Maureen Marfell on the HR Services program hotline at (800) 358-2163 or e-mail her at mmarfell@501c.com.
- How can we determine who will be eligible for unemployment benefits?
This is a complex question. In some situations, employees who resign voluntarily may be eligible. Contact the claims management team to be certain, especially if there are any unusual circumstances.
Other issues
- As a reimbursing employer, do we pay the federal unemployment tax?
As a 501(c)(3) organization, you are exempt from paying the federal unemployment tax. If you have been making these payments, you should contact the IRS and request a refund.
- What can we do to control our unemployment costs?
The people at the claims management team are happy to help you with any concerns regarding potential or existing claims. Call the claims management team at (800) 955-4351, ext 7, for information. We also hold informative workshops and live meetings around the country. Check out our upcoming workshops or call Doug Adams at (800) 442-4867 to schedule a workshop in your area.