The New York State 2022-2023 enacted budget provided for $1.2 billion in funding for a healthcare worker bonus program. Details of the program were announced on August 3, 2022, including responsibilities of employers, qualifying employees, and timelines for payment. A new portal was established for claiming bonus funds and several resources were released. However, as employers begin to strategize their implementation of the program, questions are arising.
There is a diverse set of employers who are required to implement this program, from hospitals and nursing homes, through behavioral health and intellectual/developmental disability providers, to educational institutions, school districts, and everything in between. The guidance put out by the state defines eligible employers as those who bill for services under the Medicaid State plan, HCBS waiver, or providers with an agreement to bill through a managed care organization or MLTC plan as well as certain educational institutions and other funded programs. The resources provided by the State include a crosswalk of eligible positions. Although most providers will begin applying for the bonus in September, the education portion of the program is scheduled to rollout in October.
Providers should be enrolled in eMedNY with an active MMIS ID to apply. Providers without such an ID are encouraged to contact eMedNY to enroll.
In order to be eligible for a bonus, workers must have been continuously employed by a qualified employer for the duration of at least one vesting period. They must have a qualifying title (full list here: https://www.health.ny.gov/health_care/medicaid/providers/hwb_program/#titles) and must not make an annualized base salary of than $125,000. The employee must not be suspended or excluded from the Medicaid program during the vesting period. Only employees who are hired directly by the qualifying employer are eligible, so persons contracted by a staffing agency or other intermediary are not entitled to a bonus. Homecare aides (home health aides, personal care assistants, homemakers, etc.) are also ineligible as they will receive increased minimum wage payments. However, nurses and therapists employed by CHHAs or LHCSAs may be eligible.
Qualified employers are required to identify and submit bonus claims for qualified employees. Claims must be submitted within 30 days of the publishing of the vesting schedule for the first vesting period and 30 days after the end of each vesting period for all subsequent periods. Upon vesting, employers must provide employees with Employee Attestation Form and retain the signed attestation form on behalf of the employee. Employers must pay bonuses to eligible employees no later than 30 days after the bonus is paid to the employer. Records of claims and payments must be tracked and maintained for 6 years as OMIG may audit the program. Employers do not have to provide bonuses to employees who terminated their employment prior to the due date for the payment of the bonus. A qualified employer who fails to identify, claim, and/or pay any bonus for more than 10% of eligible workers may be subject to penalties of up to $1,000 per violation.
In addition, employers will have to obtain and maintain attestation forms for each employee they deem to be eligible. Though they are not required to submit the attestation forms to the State, they will have to maintain the documentation.
Potential Payroll Tax and Benefit Considerations
Tax implications of the bonuses for employers were not released and employers are advised to contact the NY Department of Taxation and Finance for more information but per the FAQ’s bonus payments paid to NYS residents are not subject to NYS personal income tax.
The way the program is currently constructed and absent a special carve out, these bonuses would be considered compensation and employers will have to pay the employer side of the FICA taxes. Employers will also have to consider any additional expenses for 401(K) matching, and other wage based expenses when paying the bonuses.
Bonus Amounts and Issuance Procedures
Bonuses will be paid to qualified employees at the below rates per vesting period for up to a total of two vesting periods. The maximum bonus per employee across all employers is $3,000. Accruals and other leave including sick, vacation, FMLA and others should be included in the calculation of the average number of hours worked per week over the course of the vesting period. Bonus payments will be paid to the employer on behalf of the employee as part of their weekly payment from eMedNY. Payments will come with the code “HWB-HW Bonus.” Payments for non-Medicaid services will be paid to the employer via the State Financial System.
Vesting Periods and Resources
The vesting periods are detailed on the below schedule:
Next Steps for Qualified Employers
Due to the short time frame for the first submission period, qualified employers need to start acting immediately. The steps that should be taken are:
- Huddle your senior leadership team, including representatives from human resources, payroll, finance, and accounting to strategize the implementation and assign responsibilities.
- Create an account on the HWB Program Portal using a valid MMIS ID. If you do not have a valid MMIS ID, contact eMEDNY to enroll.
- Determine which employee job classifications are eligible and then which current employees were employed for the duration of Vesting Period 1.
- Develop a method to distribute, collect, track, and retain the employee attestations as quickly as possible.
- Prepare for submission for eligible employees for Vesting Period 1.
- Prepare your payroll department/processor to be in a position to payout the bonus and consider the impact to your general ledger and financial reporting.
Employers are encouraged to review the Employer Attestation, Employee Attestation and FAQ for further information. The program general overview site is here: https://www.health.ny.gov/health_care/medicaid/providers/hwb_program/ The submission portal is here: https://www.nysworkerbonus.com/#/. NYS has established a call center to assist with questions at 1-866-682-0077.
If you have questions or need additional assistance, please feel free to reach out to us.
Robert Nasso, CPA | Partner
Margaret Lally | Principal
Jeff Trubia | Partner
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us
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