R994-309-103. Election of Payments by Contributions or Reimbursement

(1) Initial Election.

A nonprofit organization electing to become a reimbursable employer must make a written election within 30 days after the organization becomes subject to the Act. Since it may take some time for the employer to obtain the IRS letter of exemption required for this election, the employer will be a contributing employer until the letter is provided to the Department timely. The employer has 30 days from the date of the IRS letter to provide a copy to the Department in order to be granted reimbursable status retroactive to the date it became subject to the Act under Subsection 35A-4-309(1)(e). When the letter is provided timely, all contributions paid by the employer in excess of benefits paid to former employees will be refunded. Under Subsection 35A-4-309(1)(e) the Department may, for good cause, extend the 30-day period within which the election is made or the 30 days within which the letter of exemption is provided. An initial election to become a reimbursable employer remains in effect for at least one calendar year.

(2) Subsequent Elections.

A nonprofit organization may elect to change from the contributions to the reimbursement method or from the reimbursement to the contributions method. An election to change from the contributions to the reimbursement method can be made only if accompanied by a copy of the letter of exemption from the IRS. To be consistent with the principle of Subsection 35A-4-309(1)(d), changes from one method to the other will remain in effect for at least two calendar years. Any election to change from one method of payment to the other must be made in writing no later than 30 days prior to January 1 of the year for which the change is requested. Under Subsection 35A-4-309(1)(e) the Department may for good cause waive the 30 day period within which a change from one method to the other is requested. As provided by Subsection 35A-4-309(3), the Department may terminate the reimbursable status if the organization is delinquent in filing Form 794, Insured Employment and Wage Report, Form 3H Employer's Quarterly Wage List, making the reimbursable payments, or paying any other amounts due.