Nonprofit organizations operated exclusively for religious, charitable, scientific, literary or educational purposes (those exempt under Section 501(c)(3) of the Internal Revenue Code) and governmental entities may discharge their obligation under the Unemployment Insurance Law by reimbursing benefits paid to their former employees on a dollar for dollar basis in lieu of tax contributions. The State of Delaware is a reimbursable employer for its Merit System employees.

1. Charging of Benefits Under the Reimbursement Option

Employers electing the benefit reimbursement option are advised of all charges made against their accounts, thereby giving them the opportunity to review these charges and object if they believe that benefits have been improperly paid or charged to their accounts.

At present, the accounts of nonprofit organizations electing the reimbursement option are charged for the total of the first compensated week, and one-half of the extended benefits paid to their former employees in subsequent weeks (see Section IX. Claims and Benefits for a definition of extended benefits). As of January 1, 1979, governmental entities were charged for the full amount of any extended benefit payments.

Following the end of each month, each nonprofit organization or governmental entity that has elected the benefit reimbursement option is billed for the amount of benefit payments charged to the employer's account during that quarter.

Payment is due within 30 days after the mailing date of the monthly bill. If the amount due is not paid by the due date, interest will be assessed on the unpaid balance at a rate of 1.5% per month or any fraction thereof.

2. Benefit Charge Determination

If there is more than one liable reimbursable employer in the base period, the percent of "benefits paid" charged to each reimbursable employer will be the same as the percent of total base period wages each reimbursable employer paid to the claimant. The base period is the first four of the last five completed calendar quarters preceding the date when the claim is filed.

The following is an example of a benefit charge determination when there is more than one liable reimbursing employer in the base period:

A claimant has total base period wages of $10,000. During the first half of the base period he worked for the State earning $5,000. For the next quarter he worked for a nonprofit employer who chose the reimbursement method, earning $2,500. For the final quarter he worked for an employer in the private sector who paid the assessment tax, earning $2,500.

The State's share is 50% of the Maximum Benefit Amount.

The nonprofit employer's share is 25% of the Maximum Benefit Amount.

The private employer's share is paid from the U.I. trust fund to which the employer has been making quarterly tax payments.

3. Group Accounts

Two or more employers that have become liable for payments in lieu of assessments may file a joint application to establish a group account for the purpose of sharing the costs of benefits paid to former employees. Each member of the group is liable for reimbursement payments in the same proportion as the benefit payments made to his former employees are to the total amount of benefits paid by all employers in the group. Such account must remain in effect for at least two years.

4. Termination of the Reimbursement Option

The election by a nonprofit organization to become liable for reimbursement in lieu of tax assessments can be terminated by filing a written notice with the Department not later than 30 days prior to the beginning of the taxable year for which such termination shall be effective. However, the entity continues to be liable for the reimbursement of benefits that are based on weeks of employment occurring prior to the termination date.

5. Contribution Method for Government Entities or Instrumentalities

Any governmental entity or instrumentality may, as an alternative to direct reimbursement, elect to pay assessments by filing written notice of its election with the Department, provided that such election remains effective for at least two calendar years, after which time it may be terminated by filing written notice with the Department not later than February 1 of any year with respect to which termination is to become effective. The assessment rate shall be determined on or before September 1 of each year by reviewing the benefit cost experience of all governmental entities which have made such election and on the basis of that experience establishing the rate for the next following calendar year.