Contributions are paid to the commission in two ways: taxes and reimbursements.

States, political subdivisions, instrumentalities of states or political subdivisions and organizations exempt under section 501(c)(3) of the Internal Revenue Code are the only entities eligible to pay reimbursements in lieu of paying taxes.

The reimbursing option is permitted under Chapter 205 of the Act. When an employer elects to pay reimbursement, the employer is required to repay the commission for any benefits paid to former employees. If no benefits are paid, the employer makes no reimbursements to the unemployment fund. However, because it is not possible to predict what will occur in the future, there is no way for a reimbursing employer to know their potential liability.

Form C-6A must be filed to elect reimbursing status. Specifics regarding the election to become a reimbursing employer are outlined in Section 205.001 and Section 205.002.

The Act has specific guidelines for electing reimbursing status. Employers eligible for this election are listed above.

According to the Act, election to pay reimbursements must be submitted:

EXAMPLE: A taxed employer receiving a liability letter dated September 5, 2000 would have until October 20, 2000 to notify the commission of their desire to become a reimbursing employer.

EXAMPLE: An employer who wishes to change from taxed to reimbursing effective January 1, 2000 would need to notify the commission in writing on or before December 1, 1999.

A reimbursing employer may request to withdraw it's election for reimbursing status and become a taxed employer by filing Form C-6F, Application for Withdrawal of Election to Pay Reimbursements. This will also be effective on the 1st day of the following year.

Section 205.021(a) of the Act allows two or more reimbursing employers to form a ‘Group Account’. The members of the Group Account share the cost of reimbursing the commission for unemployment benefits paid to former employees. Unemployment costs are borne by the entire group rather than an individual employer. Taxed employers are not eligible to form a Group Account.

The formation of a Group Account is treated as an acquisition. The transaction is recorded on commission records as a total acquisition from the predecessors (individual member accounts) to the successor (Group Account). Because all entities comprising a Group Account are reimbursing employers, there is no transfer of experience.

The following forms are filed to establish, add, withdraw or terminate a group account:

Two or more reimbursing employers requesting to form a group account file Form C-6C.
The effective date of the Group Account is the beginning of the calendar quarter in which the application is received. Once established, a Group Account must remain in effect at least two years.

Additional members may be added to a group account. The transaction is recorded on commission records as a total acquisition from the predecessor (individual member account) to the successor (Group Account). Because all entities comprising a Group Account are reimbursing employers, there is no transfer of experience. The addition of the new members is effective the first day of the quarter in which the application, Form C-6D, Joint Application For Addition of Members to a Group Account, is received.

Once a Group Account has been established, some of its members may want to leave the Group Account. The effective date for deletion of members is the end of the quarter in which the application, Form C-6E, Joint Application For Withdrawal of Members From a Group Account, is approved by the commission.

The members of a Group Account may decide to terminate the account. The deadline to apply for termination is December 1 to be effective at the beginning of the next calendar year. Form C-6G, Joint Application for Termination of a Group Account, must be filed.