The Universal Health Insurance (UHI) maximum rate for 2011 has been set at .36% (.0036) 

 The following is UHI rating structure for 2011:

             New employer first year of business (2011)     – Rate 0.0 %

            New employer second year of business (2011) – Rate 0.0%

            Third Year of business (2011)                  - Rate .04% (.0004)

            Fourth Year of business (2011)                         - Rate .08% (.0008)

            Fifth year of      business (2011)                           - Rate .36% (.0036)

Please note that rates have not been updated on Quest, but the above information is useful for phone inquiries.

Unemployment Services Corporation USC recently announced the appointment of Michael Flanagan to the position of Chief Operating Officer.

Mr. Flanagan’s appointment is a significant step in USC’s new expansion strategy of adding talented sales leaders to its business team. The objective of USC is to engage our customers from the start with informed professionals, who partner with our customers to propose, develop and deliver comprehensive unemployment service solutions, thereby relieving them from the time-consuming burden of dealing with state unemployment agencies and helping them comply with confusing state and federal regulations.  Flanagan fits this profile and will become the leader of our executive business development team.

Mr. Flanagan has over 20 years of Sales experience and expertise. He joins USC from UPS, where he held several Sales leadership positions of increasing responsibility.  Prior to UPS Michael worked as a financial analysis at State Street Bank Boston.

Michael was selected in the 3^rd round (60^th player chosen overall) by the Edmonton Oilers of the NHL in the 1983 entry draft.  He then received a full athletic scholarship for Ice Hockey to Providence College where he graduated with a BS in Finance he then went on to earned his MBA from Keller Graduate School. 

Massachusetts officials yesterday increased by 50 percent the assessment on employers for a fund that provides medical insurance to unemployed people.  This is not the Unemploymnet tax rate but the rate that both for profit and non profit are assessed each quarter to cover health care for the unemployed.  To benefit from it the individual must be collecting unemployment compensation

The Unemployment Health Insurance Rate Review Board raised the employer contribution rate for the Medical Security Trust Fund from $33.60 to $50.40 per employee in an attempt to close a deficit that is projected to reach $95 million by midyear. The increase comes as employers brace for an average 40 percent jump in Unemployment Insurance taxes on January 1 because persistently high unemployment has left the Unemployment Insurance Trust Fund some $202 million in the red.

“It is important to note this rate increase will not cover the deficit, but we were cognizant of the fact that these are challenging economic times and employers are facing hardships,” Judy Cicatiello, the state’s unemployment insurance director, told State House News Service after the decision on the Medical Security Trust Fund.

The News Service reported that enrollment in the medical security program has risen from 8,396 in November 2008 to more than 23,700 at the end of November, costing the state $14 million a month on average. Since the start of the recession, Cicatiello said Massachusetts has paid out more than $270 million in health benefits to eligible recipients.

AIM favors eliminating the Medical Security Trust Fund because it duplicates the services offered under the 2006 Massachusetts Health Care Reform law. The Commonwealth Care program created under health reform allows individuals who have lost their jobs and income to purchase short-term health insurance through the Commonwealth Connector Authority.

AIM has filed bills in each of the past three legislative sessions to eliminate the Medical Security Trust Fund. The association believes that the commonwealth would not be staring at the current deficit if lawmakers had recognized the duplicative nature of the fund and eliminated it in 2006.

Meanwhile, AIM continues to work with the Patrick administration to find ways to ease the average $259-per-employee Unemployment Insurance increase set to hit Massachusetts businesses as of tomorrow.  Analysts fear an increase of that magnitude could suppress job growth and create even more demand in the unemployment system.

A spokeswoman for the administration told State House News yesterday that Governor Patrick, who supported UI rate freezes in 2009 and 2010, is “weighing his options” on another freeze in 2011.

Projections from the Massachusetts Division of Unemployment Assistance show that the Unemployment Insurance Trust Fund, which ran a balance of more than $2 billion prior to the recession, will begin 2011 in the red. The deficit will trigger a move to the highest rate schedule permitted under Massachusetts law, raising the average UI cost per employee from the current $638 to $897.

A move to schedule G would increase total contributions from Massachusetts employers from $1.576 billion to $2.235 billion.

AIM has also joined business organizations from throughout the country in asking Congress to continue to waive the interest on loans used by Massachusetts and 31 other states to pay unemployment insurance claims.

As reported by Assoicated Industries of Massachusetts 1/03/11

The new Massachusetts online unemployment system, QUEST, continues to present problems for employers.  In assisting clients on estimating their 2011 unemployment tax rates, Jean Hamer from our office has discovered that the state’s unemployment benefit charges have been less than our figures.  In analyzing the problem, she found that the state has omitted benefit charges from October 2009 (which is the first month of the 2011 tax rating year).  Jean has brought this to the attention of the state authorities and is working with them to correct the problem before they send out incorrect tax rates.

Alert to Massachusetts’ employers:

Employers Face Rising Assessments for Jobless Health Insurance

According to the Associated Industries of Massachusetts (AIM), the Patrick administration may decide this week to double or even triple the assessment that employers pay into a fund to provide medical insurance to unemployed people.  The increase, which comes as employers face an average 40 percent jump in Unemployment Insurance taxes on January 1, reflects attempts to keep the Medical Security Trust Fund solvent at a time of high unemployment.  The 2010 medical insurance rate was $16.80 per employee who earned $14,000.

The 40% rate that AIM mentions is higher than earlier thought and would add as much as $258 per employee to each Massachusetts’ employers 2011 unemployment tax bill.

On a sad note, USC has lost one of its pioneers. Joe Bruno passed away on 11/4/10 after a year-long battle with cancer. Joe has been one of the leading forces for the past 30 years in making USC one of the country’s leading unemployment third party administrators. On behalf of Joe and his family, we wish to thank all of you for your kindness during these difficult times. Joe will be missed by all of us.

A reminder for non-profit 501c3 corporations that by December 1, 2010 you must notify the state if you wish to switch from the method that you are now financing unemployment insurance payments. By now you have received mailings from us to assist you in this effort. There is no need to notify the state if you do not intend to make a change. If we do not hear differently we will assume that you will remain on the method that you used in 2010.

 With the uncertainties of the how the states plan to replenish their depleted tax accounts most employers paying an unemployment tax should plan on paying a higher amount in 2011. Many clients have contacted our office to discuss what to expect and we encourage those who might still have questions to contact your USC account representative. 

The federal extension of unemployment is due to expire November 30, 2010 and we have not seen anything to indicate that additional federal funds will be used for unemployment benefits. This does not however mean that those exhausting their regular benefits will not receive additional benefits. In the absence of federal extensions each state has a program of it’s own in which up to 20 additional weeks of unemployment may be paid depending on the state unemployment rate. The cost of  these state extended benefits are shared 50/50 with employers and the federal government with the exception of state or local government entities who are responsible for 100% of the charges.  

In periods of high unemployment and in partnership with Congress, benefits may be extended beyond the customary number of weeks a former employee may collect (26 weeks in all states except Massachusetts where it is 30). In 2009 and 2010, up to 99 weeks per claim were allowed. The amount paid per week is generally the same for all weekly extensions unless specified differently in the legislation or a new benefit rate has been established. You must first exhaust your regular benefits before qualifying for an extended benefit. There are two types of extended benefits – state and federal.  

Federal Emergency Unemployment Compensation Extensions

During 2009, four federal extensions were in effect, each providing for a different number of weeks. The federal programs expired on June 2^nd, 2010; however, on July 22^nd, 2010 they were reinstated by Congress retroactive to June 2^nd and extended through November 2010. The new legislation continues to provide up to 53 weeks of extended benefits. The federal government pays 100% of the cost of the federal extended benefit programs. 

  State unemployment extended benefits

Each state has another program that kicks in when their state unemployment rate reaches a certain level. Federal Emergency Extensions are paid first, followed by the state program.  Thirteen additional weeks are paid in states at or above 6.5% unemployment and another seven weeks for states at or above 8%.  These costs are shared 50/50 with the federal government. The one exception is that federal funding is not provided under the state extended benefits programs to state or local government entities and they are responsible for 100% of these charges. 

                     26 weeks regular benefits

                  + 53 weeks federal extended benefits

                  + 20 weeks state extended benefits

                  = 99 weeks of unemployment benefits

When do Employers Pay?

Federal extended benefits stopped being paid on 6/2/10 and charges were switched to the Federal-State program which pays up to 20 weeks.  This is why employers and municipalities started receiving a bill for extended benefits.  However, because the Congress made the “new” federal extension retroactive to 6/2/10, all employers are due a credit for any payments made under the state program to a former employee who still had benefits due under the federal 53 week extension.

Be assured that USC is compliant with all State and Federal laws regarding the safe keeping of personal information.  Due to the stringency of these laws, USC does not retain paper files any longer.    All disputed claims are scanned and shredded and non-disputed claims are logged on our database and shredded.  We take the protection of this information very seriously and continue to ensure the safeguarding of such information.