Becoming an unemployment insurance reimburser is a cost saving strategy that does carry some risk for the employer. Unemployment insurance reimbursing employers are responsible—or liable—for compensating their state tax agency for any unemployment insurance claims the agency paid out to the employer’s separated employees. Therefore, unemployment insurance reimbursing employers leverage several different strategies to manage their unemployment insurance claims. Some employers:
- Create an in-house solution to manage their claims
- Contract with a third-party administrator to manage a reserve and administer claims payouts
- Buy a custom insurance policy that pays the claims
Each strategy carries with it a different balance of unemployment insurance tax savings and risk.