On Aug. 3, 2022, details of a new Healthcare Worker Bonus (HWB) Program were introduced in the New York State 2022-2023 budget. It allocates $1.3 billion for the payment of recruitment and retention bonuses to certain employees in frontline health care and mental-hygiene positions. This program follows the ongoing workforce effects from the global coronavirus pandemic and is aimed at increasing the state’s health-care workforce by 20 percent over the next five years. 

A new portal has already been established for claiming bonus funds and several resources have also been released. However, as employers begin to strategize implementation plans for the program, questions are arising about employer qualifications and responsibilities, worker eligibility, potential payroll tax and benefit considerations, disbursement amounts and procedures, and the next steps necessary for qualified employers. 

Qualified employers

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.

According to the guidance provided by the state, employers eligible for HWB program funding include providers participating in Medicaid with at least one employee, and other providers, facilities, pharmacies and school-based health centers licensed under the state Public Health Law, Mental Hygiene Law, and Education Law. It also covers certain programs funded by the Office of Mental Health, Office for the Aging, Office of Addiction Services and Supports, the Office for People With Developmental Disabilities, and the Office of Children and Family Services. Providers that are not included in the statute but serve at least 20 percent Medicaid enrollees may also qualify.

Qualified employers must be enrolled in eMedNY with an active MMIS ID to apply. Providers without such an ID are encouraged to contact eMedNY to enroll.

Employee eligibility

Employees eligible for HWB payments provide hands-on health-care services, including certain frontline health care and mental-hygiene practitioners, technicians, assistants, support staff, and aides with an annualized base salary of $125,000 or less. Eligible employees must also be continuously employed by a qualified employer for the duration of at least one vesting period, which is based on the hours worked during a consecutive six-month period between Oct. 1, 2021, and March 31, 2024. 

In a recent change, contracted staff in eligible titles may receive the bonus if all other requirements are met, but the eligible employer and not the contracted agency will be responsible to submit bonus claims. Home-care 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 certified home health-care agencies (or CHHAs) or licensed home-care service agencies (or LHCSAs) may be eligible.

Employer responsibilities 

Employers are responsible and required to identify and submit bonus claims for all 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. A grace period was recently granted such that claims for the first vesting period may also be submitted in the second vesting period.

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, employers will have to maintain the documentation.

A qualified employer that fails to identify, claim, and/or pay any bonus for more than 10 percent of eligible workers may be subject to penalties of up to $1,000 per violation.

Potential payroll tax and benefit considerations

Bonuses are not subject to New York State income tax but are considered supplemental wages for federal purposes. Qualified employers will receive reimbursement for any associated payroll and FICA taxes related to the bonus payments. Although the state FAQ do not require employers to make 401K matches on bonus payments, employers should follow the rules in their plan document and consider other wage-based expenses when paying the bonuses.

Bonus disbursement amounts and procedures

Qualified employees who work at least 20 hours, but no more than 30 hours per week, are eligible for a bonus of $500. Those who work at least 30 hours, but no more than 35 hours per week, are eligible for a bonus of $1,000. Employees who work at least 35 hours per week are eligible for a bonus of $1,500. 

These bonuses will be paid to qualified employees per vesting period for up to a total of two vesting periods, and the maximum bonus per employee across all employers is $3,000. 

Eligible employers can submit employees who qualify for HWB payments by creating an account on the online HWB portal at www.nysworkerbonus.com. The health-care worker bonus portal will open for education-sector employers in October.

Next steps for qualified employers

Employers must act quickly with each rolling submission schedule and due date. Huddle with your senior leadership team — including representatives from human resources, payroll, finance, and accounting — to strategize the implementation and assign responsibilities. It’s important to develop a method to distribute, collect, track, and retain employee-attestation forms as quickly and efficiently as possible. It is also important to prepare your payroll department and/or processor of this new program and process for general ledger and financial-reporting purposes. 

Employers are encouraged to review the program’s general guidance and program overview site at https://www.health.ny.gov/health_care/medicaid/providers/hwb_program. 

Working with a qualified health-care consultant can also help employers ensure all requirements are executed appropriately and compliant. For more details, employers can email the dedicated mailbox at NYSWorkersBonus@health.ny.gov or call the New York State Healthcare Workers Bonus program hotline at (866) 682-0077.      

Margaret Lally is a health-care consulting principal with The Bonadio Group and specializes in professional consulting services like Medicare and Medicaid cost reports, rate analysis, operational analysis, and data analytics.

Author’s note: The summary information presented in this article should not be considered legal advice or counsel and does not create an attorney-client relationship between the author and the reader. If the reader of this has legal questions, it’s recommended they consult with their attorney.