Premiums are contributions paid by Colorado employers to help protect the economy. We administer these contributions by paying unemployment insurance benefits to persons unemployed through no fault of their own.
The premium rate for most employers (who are not a new employer) is primarily a function of three components:
- Premiums Paid: All contributions made by the employer over the life of the account.
- Benefits Charged: All benefits charged to the employer over the life of the account.
- Average Annual Payroll: The average annual chargeable wages reported during the previous three state fiscal years (July-June).
With these three variables, the Percent of Excess is calculated using the following formula:
(Premiums Paid - Benefits Charged) / Average Annual Payroll = Percent of Excess
With any given Rate Schedule, the Percent of Excess determines the rate assigned:
- With a higher Percent of Excess a lower rate is assigned.
- With a lower Percent of Excess (including negative excess) a higher rate is assigned.
In general:
- An increase in the amount of Premiums Paid will result in an increase in the Percent of Excess (assuming that Benefits Charged and Average Annual Payroll remain unchanged).
- An increase in the amount of Benefits Charged will result in a decrease in the Percent of Excess (assuming that Premiums Paid and Average Annual Payroll remain unchanged).
- How Benefit Charges from a Claim Might Impact My Rate
Ensuring accurate and proper payments is important for all employers, but is especially significant for small to midsize employers because of the effect on smaller businesses when payments are not made properly. Due to economies of scale, the account and rate for smaller employers can be more heavily impacted by benefits charges than that of larger employers. However, it is the responsibility of all parties, regardless of business size, to engage in accurate reporting.
- Benefits Charged Against My Account
If you have benefits charged against your account, you will receive a notification in your MyUI Employer+ account (or Form UIA-20, Statement of Benefit Charges, in the mail if you have a waiver from electronic communications) in the quarter after the charges occur. You have 60 days from the date on the Statement of Benefit Charges to protest that statement.
- Rate Protest
If you believe there is an error in the figures used to calculate your experience rate, you may submit a protest in your MyUI Employer+ account. You may only file a written protest if you have obtained an electronic communications waiver from the UI Division. Rate protests can only be submitted during the protest period, which is typically 20 calendar days after the date listed on your Rate Notice.
- The resulting Percent of Excess determines the rate assigned according to the rate schedule.
- The Premium Rate Schedule used for all Colorado premium-paying employers is determined by the Reserve Ratio. The Reserve Ratio is an indicator of the health of the unemployment compensation fund. A high ratio indicates a strong fund level and is reflected in a low rate schedule. A low ratio indicates a weak fund level resulting in a high rate schedule.
- The amount charged to an employer account is based on the benefits paid. Whether or not an individual is paid, and how much, depends on many factors such as reasons the individual separated, whether the individual meets the weekly requirements, and how quickly the individual returns to work.
Contact Unemployment Employer Services
303-318-9100 (Denver-metro area)
1-800-480-8299 (outside Denver-metro area)
Fax: 303-318-9013
UI Employer Services
P.O. Box 8789
Denver, CO 80201-8789