South Carolina Unemployment Q & A

Posted: 05/20/2009

Frequently Asked Questions:

Q. How can I file an appeal on a determination with which I do not agree?

A. You may file an appeal by completing a form in the local office or you may send a letter requesting an appeal directly to the Appeals Department, P. O. Box 995, Columbia, SC 29202 or by faxing the request for appeal to 803-737-0287. The appeal must be filed (faxed, postmarked or hand delivered) within 10 calendar days, including weekends and holidays, of the mail date of the determination. Details as to the reason for appeal should be included. (See Appeals for more information.)



Q. After the claimant serves his unemployment insurance disqualification, will my account be charged?

A. If a claimant is disqualified, the liable employer’s account will not be charged with the exception of a reimbursable employer's account.



Q. What is a reimbursable employer status? Can I choose to be a reimbursable employer?

A. A reimbursable employer is an employer who chooses to reimburse dollar for dollar the amount of regular benefits in lieu of the payment of quarterly contributions. Only nonprofit organizations, the State, and political subdivisions can elect to be reimbursable employers.



Q. I am a reimbursable employer. Why was my account charged after the claimant was disqualified?

A. Section 41-35-130 of the South Carolina Employment Security Law provides that the non-charging of benefits is applicable only to those employers subject to the payment of quarterly contributions (taxes). There is no provision for the waiver of charges to, or payments from, reimbursable employers.



Q. I did not wish for my former employee to be disqualified. Can you change the determination?

A. The South Carolina Employment Security Law and policies are applied in an equitable manner to all claims. A determination of eligibility cannot be made at the will of the employer. A determination can only be changed as a result of an administrative error, a reconsideration of pertinent facts or an appeal decision.



Q. The appeal decision disqualified a previously eligible claimant, but my charge statement is showing charges to my account for this claim. Why am I being charged?

A. Depending upon when the appeal decision is rendered, the charges may not post a credit on the most recent charge statement following the decision. The credit will post to the following quarter’s charge statement.



Q. How do I get my vacation policy approved so that claims will be denied during my company’s period of closure?

A. Send a letter requesting Commission approval of your vacation closure to SCESC, Anne H. Owens, Benefit Department Director, P.O. Box 1477, Columbia, SC 29202. (See Employer Vacation Policy section for more information.)



Q. How do I know when a claim has been filed against my account?

A. When a determination of eligibility is issued, a copy of the determination is mailed to the employer’s address of record. This determination includes the claimant’s name, social security number, benefit year, effective date, weekly benefit amount and maximum benefit amount along with a determination statement.



Q. How can I file claims for my employees during a week of reduced work hours or temporary business closure?

A. There are three methods of filing: (1) Form UCB114 which may be obtained from your local unemployment office, (2) personal computer diskette which can be obtained from the Benefit Department in Columbia by calling (803) 737-2532 or (3) magnetic tape for employers with mainframe computer ability. (See Employer Filed Claims section for more details.)



Q. As president of the company, I filed a claim for my employees during a temporary business closure. Why am I disqualified?

A. Corporate officers are considered to be self-employed and have control over their own unemployment when they make a decision to close the business. Section 41-35-110 of the South Carolina Employment Security Law prohibits the payment of benefits to self-employed persons. However, there are some circumstances which allow the payment of benefits to corporate officers. Therefore, corporate officers should file a claim so that a determination of eligibility can be made.



Q. I have already provided separation information to the local office, so why have I been contacted for the same situation?

A. The South Carolina Employment Security Commission is required to obtain all pertinent separation information (company policy, dates of warnings, separating incident, etc.) in order that an accurate and just determination be rendered. Occasionally, additional information is necessary. (See Employer’s Reply section for more details.)



Q. Why did your office determine that my former employee is eligible for unemployment insurance benefits when I responded that he was terminated for excessive absenteeism?

A. Detailed information is needed in regards to the company’s policy regarding absenteeism and in regards to what occurred on the last day the claimant worked. Limited information from the employer may not be adequate to disqualify a claimant.



Q. Why did your office determine that my former employee is eligible for unemployment insurance benefits when the employee and I both agreed that the employee was not capable of performing the required duties?

A. Inability to perform the duties as required is not sufficient cause for disqualification under the law. The law requires that a willful disregard for the employer’s best interest must be evident.



Q. How is the claimant’s weekly benefit amount computed?

The computation for the weekly benefit amount is as follows:

Step 1- highest quarter wages in the base period ÷ 13 = average weekly wage
Step 2- average weekly wage ÷ 2 = weekly benefit amount



Q. I did not keep a copy of the employer’s reply that I sent in. Can I get a copy?

A. A copy of the employer’s reply can be mailed to the address of record upon request.



Q. Can I find out if a claimant is still drawing UI against my account?

A. The Determination of Eligibility of Insured Status is the official notice of the claimant’s eligibility. The only other statement mailed to the employer is the quarterly charge statement.



Q. What quarters of earnings are used in determining the claimant’s base period?

A. The first four of the last five completed calendar quarters prior to the filing of a claim are the quarters of earnings used as the base period.



Q. I never received a determination on the claimant’s eligibility. How can I get a copy?

A. A copy of the determination of eligibility can be mailed to the employer’s address of record if requested in writing.



Q. What address did your agency use when sending the request for separation information?

A. The initial request for separation information is mailed to the employer’s job site where the claimant indicates he worked.



Q. I’m calling from the corporate office of my company. The employer’s reply was not sent to the local office in the required time limits. Can the address be changed so that future requests be mailed to the corporate office?

A. The initial request for separation information is mailed to the employer’s job site where the claimant indicates he worked. The address of record will be used when the determination of eligibility is mailed to the employer.



Q. Why did your office refuse to rule on an offer of work?

A. An offer of suitable work must be made either orally or in writing to the claimant during a week of unemployment. The offer of work affidavit must be received by the agency within 7 days after such offer was made.

Children's Health Insurance Program Reauthorization Act of 2009

Posted: 04/07/2009

The Children's Health Insurance Program Reauthorization Act of 2009 extends and expands the state children's health insurance program (CHIP). The following key provisions affect group health plans and note that some obligations must be complied with by April 1, 2009.

Premium Assistance Subsidy for Employer Coverage States may elect to offer a premium assistance subsidy to help CHIP and Medicaid eligible children obtain qualified employer-sponsored coverage. The subsidy may be provided as a reimbursement directly to the employee or as a direct payment to the employer. Employers can opt out of direct payments.

Notice of Premium Assistance Subsidy:
Employer group health plans in states that provide Medicaid or CHIP premium assistance subsidies must give notice to employees of the availability of the subsidy. The Department of Health and Human Services is required to develop model notices by February 4, 2010. The notices can be provided with open enrollment materials or with the SPD. The notice requirement is effective for plan years beginning after the date the model notices are issued.

Disclosure to States:
Plan administrators of group health plans are required to disclose information about the plan to states upon request. The Departments of Labor and Health and Human Services are required to develop a model disclosure form for plan administrators. States may not request the disclosure until the first plan year beginning after the date the model disclosure form is issued.

New Special Enrollment Rights:
In addition to existing special enrollment rights, group health plans must now also allow employees and dependents who are eligible but not enrolled for coverage to enroll under the following additional circumstances. The dependent or employee loses eligibility for CHIP or Medicaid. If the dependent or employee loses eligibility for CHIP or Medicaid, enrollment must be requested within 60 days after the termination of the CHIP or Medicaid coverage. Note that the 60 day period is in contrast to other special enrollment rights which can be limited to 30 days.

The employee or dependent becomes eligible for a premium assistance subsidy through Medicaid or CHIP. If the employee or dependent becomes eligible for premium assistance through Medicaid or CHIP, enrollment must be requested within 60 days after eligibility is determined.
Plans must comply with the special enrollment right provisions as of April 1, 2009.

What Plans Need to Do:
Plans, sponsors, and administrators will need to take the following actions:

Comply with the new special enrollment rules by April 1, 2009;

Update plan documents, SPDs, cafeteria plan change in election rules, health plan change in election rules, and special enrollment right notices, as soon as possible, to reflect the expanded special enrollment rights;

Determine whether the subsidy described above is available in states where employees reside;

Provide notice of the subsidy when the government issues the model notices; and

Disclose plan benefit information to states upon request after the government agencies issue model disclosure forms.

COBRA & AMERICAN RECOVERY / REINVESTMENT ACT

Posted: 02/26/2009

The provisions of the American Recovery & Reinvestment Act includes amendments to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). These changes will affect every employer that sponsors a group health plan for employees. Employees that were either terminated or laid off on or after September 1, 2008 must be notified of these changes.

These amendments create additional COBRA notice requirements and affect payroll tax administration in order to administer a temporary federal subsidy of COBRA premiums. Employers will have to act quickly to implement the new requirements, which will include locating certain former employees and coordinating payroll and COBRA administration.

The Act also requires the Department of Labor to provide outreach, focusing on employers and others, consisting of education and enrollment assistance that will first target those individuals terminated from employment prior to enactment of the Act.

QUESTIONS & ANSWERS:

1. What is the federal subsidy?
Under the Act, for COBRA coverage periods beginning on or after the date the Act is signed into law, assistance eligible individuals will be required to pay 35% of the applicable COBRA premium. Employers that provide group health coverage through insurance will need to cover the remaining 65% of the premiums until reimbursement can be requested from the federal government. Employers that provide coverage through insurance or self-insurance will be able to obtain reimbursement of the 65% premium subsidy as a credit against their quarterly federal employment tax filings. The language of the Act suggests the subsidy would apply regardless of the level of coverage (single, single plus one, family, etc.).

2. Does the subsidy apply to small health plans (generally, those with fewer than 20 employees)?
In general, COBRA does not apply to small health plans where the employer sponsoring the plan has fewer than 20 employees. In some states, these plans are subject to state (or mini-COBRA) statutes that mandate various levels of continuation coverage. However, the subsidy would be available with respect to such plans where the state continuation coverage requirements are comparable to the continuation coverage requirements under COBRA.

3. How long does the subsidy last?
Generally, the subsidy is available for up to 9 months, but can end sooner, such as when the maximum continuation coverage period under COBRA expires. (The statute does not extend the maximum COBRA continuation coverage periods.) Additionally, the subsidy will cease to be available for COBRA coverage following the date an assistance eligible individual becomes eligible for: (1) coverage under any other group health plan (other than one consisting only of dental, vision, counseling or referral services); (2) coverage under a health flexible spending account plan; (3) coverage of treatment at certain employer on-site facilities; or (4) Medicare or Medicaid.

4. Are persons receiving the subsidy required to notify employers of certain events that would cause the subsidy to cease?
Yes. The Department of Labor is expected to specify the time and manner of notice. Under the Act, absent reasonable cause and willful neglect, the failure to provide this notice would subject the individual to a penalty equal to 110% of the premium reduction provided after termination of eligibility.

5. Who are assistance eligible individuals?
Individuals who are or were otherwise eligible for COBRA continuation coverage, who lost coverage under their employer-sponsored group health plan due to an involuntary termination of employment between September 1, 2008 and December 31, 2009, AND who elect COBRA continuation coverage are assistance eligible individuals under the Act. The Act does not expand on what constitutes an involuntary termination. However, the language in the Act suggests that any type of involuntary termination qualifies for the subsidy, including an involuntary termination for cause, unless it amounts to a COBRA gross misconduct situation.

The Act requires the Department of Labor (DOL) to provide for expedited review of any situations where an individual requests treatment as an assistance eligible individual and the group health plan denies that treatment. Under this provision, the DOL is required to make its determination within 15 business days of the date it receives the application for review.

6.What about persons who recently declined COBRA coverage prior to passage of the Act?
Congress recognized that many individuals who were recently terminated may have declined to elect COBRA continuation coverage because of its cost. Accordingly, the Act includes a special election opportunity for assistance eligible individuals who were eligible to elect COBRA coverage when they were terminated from employment, but did not so elect. These individuals are entitled to an extended election period that begins on the date of the Act’s enactment, and ends no sooner than 60 days after an extended election notice is provided to the individuals. It is important to note that this extended election period does not change the fact that the individual’s termination from employment remains the qualifying event for purposes of COBRA.

The Act requires employers to locate former employees who previously declined COBRA and provide notice of the right to COBRA coverage with the government subsidy. If an eligible individual elects COBRA continuation coverage during the special extended election period, COBRA coverage will commence with the first period of coverage beginning on or after the enactment of the Act. However, for purposes of determining the maximum COBRA coverage period, the date of the involuntary termination of employment (or the date of the loss of coverage resulting from such termination, if applicable) will continue to be treated as the qualifying event.

This means that the COBRA continuation coverage period available to an individual who makes an election during the extended election period will be determined based on the date of the qualifying event as described above. For example, an assistance eligible individual terminated on September 30, 2008, who makes a timely election during the extended election period, generally will be entitled to COBRA continuation coverage prospectively beginning March 1, 2009, though the 18-month maximum coverage period is measured from October 1, 2008.

8. What about persons who already paid the full COBRA premium?
The Act entitles such assistance eligible individuals to reimbursement from the employer for the excess over which the individual is required to pay under the Act, or a credit of that amount against future COBRA premium payments. The credit is permissible depending on whether it is reasonable to expect the individual to use it within 180 days of the full premium payment.

9. What options are there with respect to plan enrollment? Under COBRA, a qualified beneficiary generally is entitled only to elect continuation of the same coverage option he or she was receiving on the day before the date of the qualifying event. The Act permits employers to be flexible here. Assuming different coverage options are available, an assistance eligible individual may enroll in coverage under a plan that is different than the coverage in which he or she was enrolled at the time the qualifying event occurred. To make this change, the assistance eligible individual must make his or her election change within 90 days after receiving notice. Such election must be permitted by the employer. The premium for such coverage must not exceed the premium for the coverage in which the individual was enrolled prior to termination of employment. In addition, the different coverage also must be offered to active employees at the time the election is made and the different coverage may not be coverage providing only dental, vision, counseling, referral services (or a combination of these), or coverage under a flexible spending arrangement or coverage that provides services at certain on-site medical facilities.

10. Are there income limitations on who may receive the subsidy?
Assistance eligible individuals who receive a subsidy under the Act and who are considered high-income individuals will see their income tax liability increased by the amount of the subsidy for the tax year in which they receive the subsidy. High-income individuals are those individuals with modified adjusted gross income (AGI) that exceeds $125,000 ($250,000 in the case of joint return filers) for the tax year in which they receive the subsidy.

11.What are the notice requirements for employers? Employers will need to amend their current COBRA election notices temporarily to include general information about the availability of the premium subsidy and, if applicable, the option to enroll in different coverage. Specifically, the notices must include:
1. The forms necessary for establishing eligibility for the premium subsidy;

2. Contact information of the plan administrator and any other person with information regarding the premium subsidy;

3. A description of the extended election opportunity for those who previously declined COBRA continuation coverage;

4. A description of an assistance eligible individual’s obligation to notify the plan when he or she becomes eligible for coverage that would cause eligibility for the subsidy to cease and the penalty for the failure to do so;

5. A prominent description of the qualified beneficiary’s right to the COBRA subsidy and any conditions on such right; and

6. A description of the option to enroll in different coverage under the health plan, if applicable.

This information must be included in the COBRA election notices provided to persons who become eligible for COBRA continuation coverage after enactment of the Act. For assistance eligible individuals who became eligible for COBRA continuation coverage prior to enactment of the Act, a similar notice must be provided within 60 days of enactment of the Act. The Act directs the Department of Labor to issue model notices within 30 days after enactment of the Act.

How do employers apply for the reimbursement?
Because the federal COBRA premium subsidy is reimbursed to employers through the federal quarterly payroll tax reporting system, the Act requires employers to advance the premium subsidies until the employer’s payments can be recouped through reduced federal payroll tax payments. Employers will have to determine the total amount of the subsidy with respect to premiums received during the federal payroll tax reporting period from assistance eligible individuals that have elected COBRA continuation coverage. The employer may use this amount as an offset to its federal payroll tax liability. For purposes of the Act, payroll taxes includes amounts to be withheld for federal income taxed and the employer and employee portions of FICA, Social Security and Medicare taxes.

To the extent that such amount exceeds the amount of the liability for these federal payroll taxes, the Internal Revenue Service will reimburse the employer for the excess directly. If an employer claims too much in reimbursement, it will be treated as an underpayment of federal payroll taxes to be assessed and collected accordingly.

In addition to expected modifications to current payroll tax reporting forms, the Act requires additional information be provided by employers seeking reimbursement of subsidy payments, such as attestations that terminations of employment were involuntary and the levels of coverage individuals are receiving.

-Information provided by SHRM