The Miscellaneous Tax Bill, H.873, was approved by the Ways and Means Committee and formally introduced last week. It includes several provisions raising concerns for employers, arguably the most troubling being a significant increase and expansion of the so-called “employer assessment”, i.e. the former Catamount Tax. The changes would raise an additional $6 million in FY17.
Increased Rates, Higher Rates the Larger the Employer
The current employer assessment, charged quarterly, was set at $133.30 per “uncovered” FTE through the end of 2014, and was then indexed to premium growth in the Vermont Health Exchange. Under H.873:
- Employers with less than 20 “uncovered” FTEs would be charged $151.12 per “uncovered” FTE.
- Employers with less than 100 “uncovered” FTEs would be charged $210.00.
- Employers with less than 100 or more “uncovered” FTEs would be charged $249.00.
- The assessment would be indexed similarly to current law starting in 2017.
- The number of exempt “uncovered” FTEs and employer does not have to pay for, which is currently four FTEs for all employers, would drop to three and only apply to companies with less than 20 “uncovered” FTEs.
As you might know, an employee does not need to lack health insurance to be considered “uncovered” for the purposes of the assessment. For reference, the current statute defines an “uncovered” employee as:
- an employee of an employer who does not offer to pay any part of the cost of health care coverage for its employees;
- an employee who is not eligible for health care coverage offered by an employer to any other employees; or
- an employee who is offered and is eligible for coverage by the employer but elects not to accept the coverage and either: (1) is enrolled in Medicaid; (2) has no other health care coverage under either a private or public plan except Medicaid; or (3) has purchased health insurance coverage as an individual through the Vermont Health Benefit Exchange.
The most egregious examples under current law are employers having to pay an assessment for employees who have individual insurance through the exchange and employees who are on Medicaid.
Employer Action Critical
H.873 marks just the latest in a continuing series of increases and expansions of this outdated and unwarranted tax on employers to cover budget gaps. In addition to being a real and tangible burden on employers, it is currently devoid of any real logical justification after the repeal of Catamount Health years ago and the assessment’s application to employees who have insurance through Medicaid or the Exchange.
AIV believes that the assessment should ultimately be repealed, and at the very least the proposed increase should be struck from H.873 and the assessment no longer applied to employees with insurance through the Exchange or on Medicaid.
Members are strongly encouraged to contact us at email@example.com to learn more about your options for engaging on this issue. With the bill on the House floor as soon as Wednesday, you can contact your House Representatives by leaving messages with the Sergeant-at-Arms Office at 802-828-2228 or 800-322-5616. You can also send a fax (be sure to identify which Representative you are trying to reach) to 802-828-2424.
To identify your Representatives and find additional contact information, you can click here.