RCPA - Rehabilitation and Community Providers Association


ISO Bulletin Released by OMR
January 7, 2004

Mental Retardation Bulletin #00-04-01 has been released, which advises county administrators regarding the Office of Mental Retardation's (OMR’s) policy that requires counties to offer Intermediary Service Organization (ISO) services to individuals or their representatives. The companion to this bulletin is the May 6, 2003 draft “Guidelines for Operating a Vendor Fiscal/Employer Agent and Agency with Choice Intermediary Service Organizations."

ISOs were developed to perform two primary functions:

  1. Reduce individuals employer-related burden through the provision of appropriate fiscal and supportive services.
  2. Assure state and counties that support services are being provided in compliance with federal, state, and local tax and labor requirements.

Individuals who hire their qualified support service worker(s) directly are considered “common law employers” by the Internal Revenue Service. ISOs can assist the individual by managing the employer related tasks on their behalf.

There are two ISO models allowed:

  1. A Vendor Fiscal/Employer Agent ISO model may apply for and receive approval from the IRS to be an employer-agent on behalf of the individuals for the limited purpose of withholding, filing and paying federal employment taxes, and income taxes. Under this model, individuals/representatives are able to recruit and hire support workers, determine work schedule, determine tasks to be performed, orient and train their workers, manage daily tasks performed, and dismiss their workers when appropriate.
  2. An Agency with Choice ISO is the common law employer of the support services worker while working together with individuals/representatives to recruit and refer workers to the agency for hire and provide services to persons, provide/participate in workers training, determine their workers work schedule, determine tasks to be performed, manage daily activities of worker, and dismiss them as necessary.

The bulletin provides more in-depth information regarding the ISO. All counties must offer either one of the ISO models by July 1. Both models must be available by July 1, 2005. All ISOs must comply with Title 55, Chapter 4300 Regulations.

For a copy of the bulletin, contact Linda Drummond at PCPA.

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