What describes the Reimbursable method for unemployment compensation?

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Multiple Choice

What describes the Reimbursable method for unemployment compensation?

Under the reimbursable method, the local government is financially responsible for unemployment benefits paid to its former employees. The state pays the benefits to eligible claimants, and then invoices the municipality for the total amount of benefits paid to its workers. This makes the municipality’s cost come through reimbursements rather than through a payroll tax. The option that states the municipality reimburses DES for all benefits paid matches this arrangement exactly. The other descriptions don’t fit the reimbursable approach: a percentage FUTA tax reflects a tax-based, contributory funding structure; implying the state funds benefits outright would be a different setup; and saying the state pays only a portion would not describe the full reimbursement responsibility assigned to the municipality.

Under the reimbursable method, the local government is financially responsible for unemployment benefits paid to its former employees. The state pays the benefits to eligible claimants, and then invoices the municipality for the total amount of benefits paid to its workers. This makes the municipality’s cost come through reimbursements rather than through a payroll tax. The option that states the municipality reimburses DES for all benefits paid matches this arrangement exactly.

The other descriptions don’t fit the reimbursable approach: a percentage FUTA tax reflects a tax-based, contributory funding structure; implying the state funds benefits outright would be a different setup; and saying the state pays only a portion would not describe the full reimbursement responsibility assigned to the municipality.

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