Reimbursable Employers

Rather than pay quarterly contributions (tax) on employee wages, a reimbursable employer must reimburse the unemployment insurance (UI) trust fund for all unemployment benefits charged to their account as a result of UI benefits paid to current or former employees.  

Reimbursable employers must:

  • File quarterly wage reports with UI, reporting the TOTAL wages paid to each employee. 
  • Pay Administrative Fund Tax (AFT) equal to 0.08% of the TOTAL wages paid each quarter. 
  • Reimburse the UI trust fund for all UI benefits paid to current or former employees. 

 

Reimbursable Employer Q & A

    • Non-profit organizations as defined in section 501(c) (3) of the Internal Revenue
    • Government agencies
    • An Indian Tribe and its’ tribal units 
    Reference: MCA 39-51-1103

  • A Method of Payment Election request must be submitted to the UI Contributions Bureau.  Non-profit organizations may be asked to provide a copy of your IRS 501 (c) (3) exemption letter.  Tribal entities may be asked for a copy of the tribal corporate charter.

    Reference: MCA 39-51-1124

    Employers registering online for a new UI account may submit their method of payment election with their registration.  If it is not submitted with your registration, it must be received by the Contributions Bureau within 30 days of the date your account is made active. 

    Employers with an existing Montana UI account, wishing to change their election, may log into UI eServices for Employers to submit the request. 

    UI eServices for Employers. 

  • Generally, if your organization has stable employment with very low turnover, reimbursable status may be to your advantage. If you have seasonal layoffs or other fluctuations in the pattern of employment, an experience-rated account would be your best option for budget purposes.

  • Benefit charges are prorated according to the percentage of wages you paid to the total wages in the claimant’s base period. The claimant’s base period is typically the first four of the last five completed calendar quarters prior to the date the claim is filed. 

    Example: You are a reimbursable employer. Your employee, Jane, quits to accept a better-paying job and later is laid off by her new employer. She files and is eligible for unemployment insurance benefits. Since you paid Jane 64% of the total wages she received during her base period, your account is charged for 64% of the benefits paid to Jane even though she quit your business.

    Reference: MCA 39-51-1125

  • It is very important to respond timely to all notices or requests for information regarding any benefit claims filed.  Your responses assist with our eligibility determinations. The more information we have, the more accurate our determinations. If you have not already, we strongly encourage all employers to sign up and use UI eServices for Employers to receive and respond to benefit claim fact-finding.  Within eServices we provide multiple options for responding including access to SIDES E-Response.

    Reimbursable employers should note, if a former employee had another employer after they left your employment, and they are determined to be eligible for UI benefits, you will be charged for benefits paid to that claimant, regardless of the reason(s) they left your employment.  However, if you were their last employer, then their eligibility is based on their reason for separating from your employment. 

    If you have questions or concerns regarding any charges to your account please call our Charging Unit at (406) 444-0399. 

  • You will receive a monthly Reimbursable Benefit Payment Notice.  The notice will include a list of individuals who received benefits and the amount paid.  Reimbursable charges can be paid monthly or within 30 days of the end of the respective calendar quarter in which they were charged (with your quarterly report and AFT payment).  Interest will be charged on any Reimbursable charges not paid by the quarterly due date.

  • In addition to interest assessments, if you are delinquent in making payments to reimburse UI for benefits paid, your reimbursable status may be terminated effective the beginning of the next tax year. A tax year begins on January 1 for non-profit organizations and tribal units and July 1 for state and local government agencies. Involuntary termination of reimbursable status requires you to become an experience-rated employer for at least 2 years. You may then re-apply for reimbursable status or remain as an experience-rated employer.

    Reference: MCA 39-51-1126

  • To change your method of payment from a reimbursable to rated employer, or vice-versa, you must submit a new Method of Payment Election by the following deadlines:

    • If you are a non-profit or tribal entity, submit your Method of Payment Election by December 1.  Your new election will be effective January 1.

    • If you are a governmental entity, submit your Method of Payment Election June 1. Your new election will be effective July 1.

    To submit a new Method of Payment Election, logon to UI eServices for Employers and navigate to the Account Services tab on your account. 

    Changes from one method to the other remain in effect for at least two complete years.

     

  • Changes from one method to the other remain in effect for at least two complete years.

     

  • If you change from reimbursable to the experience-rated method, you must reimburse the Department for benefits paid on wages earned during the time you were a reimbursable employer.

    Example: You were a reimbursable employer during 2020 and 2021. For 2022, you elect the experience-rated method. If a former employee receives benefits in 2022, based on wages you paid in 2021 when you were reimbursable, you must reimburse the Department for the benefits paid based on the 2021 wages. You will also pay contributions on the 2022 wages. If you change back to a reimbursable employer in 2024, any benefits received by a former employee based on wages you paid in 2022, would not be reimbursable since you already paid contributions on those wages.

  • The reserve amount on the experience rated account stays with the experience rated account. The reserve is not refunded nor does it get applied to any benefit charges or taxes owed that may occur on your reimbursable account. When the experience rated account has been terminated for a period of 5 years or more, the previous experience, including the reserve, is no longer available for future rate computation.

     

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