How do Taxes on Uninsured, Self-insured Employers Worker in Virginia?

Bits & Pieces

Do you know how taxes on uninsured and self-insured employers in Virginia work? Simply Research subscribers do, but here's a quick look.

One half of One Percent

For the purpose of providing funds for compensation benefits awarded against any uninsured or self-insured employer under any provision of this chapter, a tax not to exceed one-half of one percent shall be assessed, collected and paid into the state treasury.

Additional Tax

This tax shall be in addition to the tax for the Workers' Compensation Commission Administrative Fund and the tax for the Second Injury Fund and shall be held by the Comptroller of the Commonwealth solely for the payment of awards against the Uninsured Employer's Fund and related administrative costs.

Costs

The costs of administering the Uninsured Employer's Fund, including third-party administrator fees, legal fees, medical audit fees, applicable salaries and benefits, and any other direct expenses necessary to carry out the provisions of this chapter, shall be paid out of such fund. Funds used for such costs shall not be subject to recoupment.

Budget Surplus

At the end of any calendar year in which the Uninsured Employer's Fund has to its credit a sum in excess of the next year's budgeted expenditures, the tax shall be suspended for the ensuing calendar year.

Case Example

Uninsured Employer's Fund v. Flanary, No. 1521-97-3 (Va. Ct. App. 04/21/98). The Fund acts as a "governmental insurance or guaranty program" and functions as a workers' compensation insurer of last resort under the limited circumstances described in the
statute, i.e., when an employer fails to be suitably insured.

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