Consumer-directed services is a Service Delivery Option. It does not change WHAT service you receive… it determines WHO hires the Employees.
- In Agency-directed Services, the agency has training on employment and payroll laws.
- Unfortunately, in Consumer-directed Services, this training has to come through personal research. This page is here to help provide some of that information!
HHSC has lots of forms that describe the 2 roles in CDS:
- The employer
- the recipient if adult,
- the parent if a child,
- the guardian if the recipient has a guardian
- The Financial Management Service agency (aka payroll company)
Here are the helpful ones:
- Consumer Directed Services Responsibilities Form 1584
- Relationship Definitions in Consumer Directed Services Employer’s Acknowledgment and Certification Form 1726
Some steps in the CDS process will be familiar to you… but there are some that seem unknown.
|1. Family chooses CDS option for services.
2. Family selects a FMSA to assist them with CDS tasks.
3. Family schedules an orientation with FMSA.
4. At orientation, FMSA brings application packets for hiring Employees
|5. Either a parent, guardian, or the adult recipient of services signs documents to allow the FMSA to:
· Establish an Employer Identification Number (EIN) also known as a Federal Tax Identification Number to be an Employer.
· Be the Agent who can file tax documents on behalf of this new entity.
|6. Each employee fills out a packet, the employer signs each page, setting the payrate and schedule, and the packet is sent to the FMSA.||7. FMSA runs a criminal background check and Employee Misconduct Registry check, reviews all the paperwork, and lets the employer know that the employee is ready to start working.|
|8. Each week, the employer trains the employees, makes a schedule, gives feedback, and collects timesheets.
9. Timesheets are submitted to the FMSA.
|10. FMSA processes payroll. This involves:
· Paying the Employees’ wages
o Withhold Employees’ income tax, FICA, FUTA, & SUTA
· Pay Employer portion of FICA, FUTA, SUTA
o File TWC Form C-3 Employer’s Quarterly Report (SUTA)
o File IRS Form 940 Employer’s Annual FUTA Tax Return
o File IRS Form 941 Employer’s Quarterly Federal Tax Return (income tax, FICA)
· Bill HHSC for the number of hours used.
o Hold any funds not used on wages, employee tax payments, and employer tax payments for other “Allowable Expenditures”
|11. Paychecks are direct deposited or mailed to employees.||12. FMSA keeps track of what they have paid and what they have billed HHSC for.
13. Employer should also keep track of what has been paid, including knowing the tax rates each person under, to know what funds are available for “Allowable Expenditures”