Financial Management Service
The only service you must use in the Self-Determination Program (SDP) is a Financial Management Service (FMS). Your FMS must be approved (vendored) by your regional center. Not all FMSs work with every regional center. All of the money from your budget is paid by your financial management service. That means it will not impact your public benefits (like SSI asset limits).
Your FMS helps you by:
- Paying for the services, items, and activities in your spending plan.
- Giving you a monthly report so you know how much money you’ve used.
- Taking care of taxes and rules if you hire workers.
Each FMS may do things a little differently, so ask how they work before you choose one.
FMS Three Service Models
There are three ways you can receive services from an FMS: Bill payer, Co-Employer, and Sole-Employer model. Not every FMS offers all three models. Learn about each model so you can decide the right one for you!!!
Bill Payer Model
The Bill Payer service model helps people in the Self-Determination Program manage their money and pay for the services and supports they need. It makes sure that payments are correct and that they match the participant’s spending plan.
In the Bill Payer model, you do not hire employees directly. However, you may hire employees through an agency or service.
Co-Employer Model
If you want to have employees, you can choose the co-employer model. In this model, the FMS hires the employee on your behalf. That means they are the employer of record.
Because they are hiring them for you, your employees will need to follow the rules of their employer (the FMS). An FMS can make decisions about your employees like when to offer health insurance or other benefits and you will have to include it in your spending plan.
The law requires that any employee providing personal care (such as toileting assistance) MUST have a background check. In co-employer the FMS may require all of their employees must have a background check. They can limit if the employee is able to work for multiple SDP participants and limit hours an employee can work.
The FMS in co-employer does not help you find, schedule, or manage your employees. They will provide worker’s compensation insurance and pay taxes.
Sole Employer Model
This model gives the participant the most freedom and authority. The participant is the employer of record and directly hires their staff. As the employer, you can decide if you want to offer benefits such as health insurance or vacation pay.
The Financial Management Service (FMS) will do payroll, taxes and background checks if you require them. Some FMS will include your employees in their workers’ comp insurance, and some will have you purchase your own.
Like in co-employer, you will be in charge of finding, scheduling, and managing the employees.
Workers Comp Insurance
If you choose the co-employer or sole employer model, you are hiring employees and will need to have workers’ comp insurance.
Workers’ compensation insurance helps if a worker gets hurt or sick from their job. It pays for doctor visits and lost wages while they recover. In California, the law says you must have this insurance if you have employees. It protects both the worker and the boss.
Getting insurance sounds much more complicated and scary than it really is. There are supports that will help you!
Employer Burden Rate
When you hire a worker, both you and the worker pay some of the taxes. The part you pay, plus things like sick time or health benefits, is called the Employer Burden Rate in the Self-Determination Program. You don’t need to be a tax expert—the Financial Management Service (FMS) handles it for you. They give you a percentage to add to the hourly rate you have selected to pay your employee.
Each financial management service has an approved employer burden rate from the Department of Developmental Services (DDS). They are the department that oversees the regional centers.
Here is a link to see all of the Financial Management Services APPROVED employer burden rate:
Employer Burden Rate Note:
Employer Burden Rate Note description.
Complete Guide Training Video: Financial Management Service
Complete Guide Training Video description.
Video coming soon.