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:
- 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.
- 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.
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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.”
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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.
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On audit, the Department is required to assess for uncovered employees with no Form HC-2 on file.
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Employees not covered by the employer’s plan must obtain a new HC-2 every year.
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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.
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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.
- 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.
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:
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April 25 (for January-March)
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July 25 (for April-June)
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October 25 (for July-September)
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January 25 (for October-December)
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:
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the total monthly premium cost paid for any employer-sponsored plan
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the employer’s share of the monthly premium
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the employee’s share of the monthly premium
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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.
LAWS, REGULATIONS AND GUIDANCE
Guide to the Health Care Fund Contribution Assessment
For Employers: Health Care Fund Contribution Assessment
Health Care Coverage Decision Tree