DEPARTMENT OF TAXES 

  For Employers: Health Care Fund Contribution Assessment 

    General Information 

 In 2006, the Vermont legislature started requiring         2.  Form HC- 2, Declaration of Health Care Coverage     
 employers who do not offer insurance to all of their           Uncovered employees must complete Form HC-2. 
 employees to pay a “ Health Care Fund Contribution so”         Though not required, employers also may ask covered 
 that they share in the cost of providing health care           employees to complete this form. The form must be 
 coverage.                                                      completed every year. If an employee’s health 
  
                                                                coverage changes during the year, the employee must 
 You must report your assessment to the Department of 
                                                                complete a new HC-2 at that time. Do not submit this 
 Taxes each quarter.  When filing Form WHT-436, 
                                                                form to the Vermont Department of Taxes. Retain this 
 Quarterly Withholding Reconciliation, employers must 
                                                                form for your records for three years.  
 include the Health Care Contribution Assessment for all 
                                                            3.  WHT- 436, Quarterly Withholding Reconciliation      
 employees not covered by health care coverage. This fact 
                                                                The employer must complete this form each quarter 
 sheet provides information to help you determine which 
                                                                and enter the Health Care Contribution Assessment 
 employees are considered to be covered and uncovered 
                                                                (calculation made on Form HC 1).- Submit Form    
 and how to report and pay the assessment.  
                                                                WHT-436 with payment of the assessment, if any, 
 Forms you will need to report the health care contribution 
                                                                along with your employer withholding to the 
 You or your employees will use three forms:  
                                                                Vermont Department of Taxes.   
 1. Form HC-1, Health Care Fund Contribution 
    Assessment 
    This form is a worksheet to help employers determine 
    any assessment liability for the quarter. Do not submit 
    this form to the Vermont Department of Taxes. Retain 
    this form for your records for three years.   

            You may complete Form WHT- 436 online at myVTax.vermont.gov. If you are using a paper form,      
                         be sure you have the most current form. Find all tax forms at tax.vermont.gov. 

    Definitions 

Employee                                                    governmental or municipal elected officials; volunteer 
Any individual who is:                                      emergency personnel; and sole proprietors. 
 
•   18 years of age or older for all of a calendar quarter, Employer 
•   employed full- time or part-time by an employer to 
                                                            Any person who is required to furnish unemployment 
    perform services in Vermont, and  
                                                            insurance coverage under Vermont law at 21 V.S.A 
•   reported by an employer for purposes of complying 
                                                            Chapter 17. 
    with Vermont unemployment insurance (UI) 
                                                             
    coverage under Vermont law at 21 V.S.A. Chapter 17.     Full-Time Equivalent (FTE)  
 
Hours worked by employees whose wages are                   The number of “ uncovered full” time-equivalent 
specifically exempted from UI reporting are also            employees is expressed  as the number of employee hours 
excluded from health care reporting. Examples of            worked in Vermont during a calendar quarter divided by 
exempted wages include but are not limited to               520. The FTE calculation is based on a 40-hour work week. 

                                                                                                            Page 1 of 3 
  Disclaimer: The information provided here is intended to be an overview only. 
  Vermont tax statutes, regulations, Vermont Department of Taxes rulings, or court 
  decisions supersede information presented here. 
  Rev. 08/2021 • Pub. FS 1144-  

No more than one FTE (520 hours) may be assessed             d.  A “ seasonal or ” part“ time- employee” who has 
against an individual employee, regardless of the actual         Medicaid coverage or no coverage, or who has 
number of hours worked by that employee during a                 worked 21 weeks or more (in the case of a seasonal 
calendar quarter. This means an employer should stop             employee), or has worked 30 or more hours per week 
counting any individual's hours in a quarter when they           in the reporting quarter (in the case of a part time-
reach 520.                                                       employee). 
 
                                                             e.  A full- time, part-time, or seasonal employee not 
a. For the purpose of calculating FTEs, the phrase “hours 
                                                                 covered by the employer and for whom the 
   worked during a calendar quarter” means hours 
                                                                 employer has no declaration of health care 
   worked during all pay periods in that quarter for 
                                                                 coverage (Form HC 2).-    
   which gross wages were reported as paid, up to 520 
                                                              
   hours, per employee, per quarter.                         Seasonal Employee 
b. An FTE should not include any employee hours 
                                                             An employee who works 20 or fewer weeks, in a job 
   worked by a “ seasonal or ” part“ time- employee”                                                                   
                                                             scheduled to last 20 weeks or less in a calendar year. 
   (definitions follow) of an employer who offers health     "“Week" means the seven day calendar week. Only weeks 
   care coverage to all of its regular full-time employees.  
                                                             in which an employee actually works (as opposed to being 
   This applies only if  the seasonal or part time employee 
                                                             on payroll) count as a week worked. 
   has health care coverage under either a private plan or    
   any public plan except Medicaid. See below for the        Some employees will start as seasonal but then work for 
   definitions of “ part- time employee” and  seasonal“      more than 20 weeks. In that case, an employer must be 
   employee.”                                                sure to pay an assessment for the first 20 weeks if the 
                                                             assessment was not previously paid.  
Uncovered Employee                                            
Any of the following types of employees are considered       Part-Time Employee 
“uncovered employees”:                                       An employee who is generally scheduled to work fewer 
a. An employee of an employer who does not offer             than 30 hours a week or fewer than 390 hours in a 
   to pay any part of the cost of health care coverage       calendar quarter . 
   for its employees. Coverage must include                   
                                                             Health Care Coverage 
   hospital and physician services. 
b. An employee who is not offered health care coverage       For purposes of Health Care Contribution reporting, 
   by the employer even though coverage is offered to        health care coverage includes any private plan that 
   other employees.                                          includes both hospital and physician services. For 
c. An employee who is offered health care coverage           purposes of determining whether a seasonal or part    -
   by the employer but chooses not to accept the             time employee is covered, health care coverage may 
   coverage and is enrolled in Medicaid; has no  other       also include a plan from the Vermont Health Benefit 
   health care coverage under either a private or public     Exchange as long as the employer offers private 
   plan except Medicaid; or has purchased health             coverage to all of its regular full- time employees.  
   insurance coverage as an individual through the            
                                                              
   Vermont Health Benefit Exchange.                           
 Important Reporting Details 

Nothing has changed with the reporting of information            employees must be reported as uncovered. This is 
related to withholding reconciliation. Reporting data            without regard for whether the employees secure 
on the upper portion of Form WHT- 436, Quarterly                 coverage anywhere else.        
Withholding Reconciliation, remains the same. The             •  Use Form HC-2, Declaration of Health Care Coverage, 
following information only relates to determining and            to determine whether you offer coverage. Giving cash 
reporting the Health Care Contribution Assessment on             bonuses to employees to purchase their own coverage 
Form WHT- 436:                                                   is not considered offering a plan. 
 
                                                              •  Your employees must complete Form HC-2, 
•  If you do not offer coverage for which you pay 
                                                                 Declaration of Health Care Coverage, every year. If 
   some part of the expense, all hours worked by your 

                                                                                                             Page 2 of 3 

  the employee’ s health care coverage changes during       period are neither offered nor able to enrollin a 
  the year, employee is required to complete a new form     health care plan. As such, employees in a 
  with the new information. You must retain HC- 2           probationary period would be considered 
  forms for all employees for three years in case of        “uncovered,” unless they obtain health care 
  audit.                                                    coverage before the end of the reporting quarter.  
• If your employee count is equal to or less than the     • If an employee has health care coverage at any 
  exempted number of FTEs, you must report “ zero.    ”     point during the reporting quarter, the employee 
  Leaving these lines blank will result in the return not   is excluded from the FTE calculations for the 
  processing, which may lead to an assessment,              entire quarter.   
  interest, and/or  penalty charges.                      • All hours worked during the reporting quarter by 
• You must track hours worked by “ uncovered    ”           uncovered seasonal employees, who work their 21st 
  employees throughout the quarter. However, a              week and beyond, will be included in the 
  single employee should not have more than 520             “uncovered” FTE calculation during the quarter the 
  hours attributed for a quarter.                           21st week was worked and for each quarter that 
• An employee who is “offered” and  enrolled“   ” in a      follows during the calendar year. 
  health care plan, but is not actually covered until the • All hours worked by a uncovered part-time 
  following quarter, is considered to have health care      employee, who works fewer than 30 hours a 
  coverage, as long as the period between enrollment        week or fewer than 390 hours in a calendar 
  and coverage is not longer than six months. This          quarter, must be included in the “ uncovered” 
  situation is not a customary probationary period as,      FTE calculation, for the affected quarter. 
  generally speaking, employees in a probationary 

                    Find the FTE exemption and Health Care Premium table on Form HC-1. 

More Resources                                            • For questions about potential eligibility for all state 
• For more information, visit our website at                health plans and/or premium assistance for Vermont 
  http://tax.vermont.gov/business and-  corp/hcfca-         Health Connect and employer-sponsored insurance 
  or call the Department’ s Taxes Business Tax Section at   plans, call the Agency of Human Services at  
  (802) 828 2551.-                                          (800) 250 8427.-  

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