California, Massachusetts, New Jersey, Vermont, Rhode Island, and the District of Columbia (DC) have state-specific Individual Mandate requirements and associated annual reporting requirements that largely mirror the Affordable Care Act (ACA) 6055 provisions. Some of these state requirements are in response to the ACA Individual Mandate penalty adjustment to zero (effective January 2019) per the Tax Cuts and Jobs Act. Employers with employees residing in these states (and in DC) need to be aware they have state reporting obligations in addition to ACA reporting obligations. In most cases, but not all, the federal ACA 1094/1095 reporting forms can be used to satisfy these state requirements.
Background
Under the ACA, Section 6055 Information Reporting requires providers of minimum essential coverage (MEC) to report coverage information to the IRS and to furnish statements to the covered individual that show which months during the year the individual satisfied the Individual Mandate. Section 6055 reporting is typically through the IRS B-series forms (1094-B transmittal form and 1095-B health coverage form). To satisfy this ACA requirement, small employers who sponsor self/level funded plans use the B-series forms and large employers who sponsor self/level funded plans have the option to use either the B-series forms or Part III of the 1095-C form.
California
Important Dates
- Mandate effective starting in 2020 with annual reporting due March 31, 2021.
State Guidance
- Individual mandate bill SB-78 was signed into law July 2, 2019. See CA FTB information reporting page and 2021 reporting guidance.
Individual Mandate Penalties
- CA residents must have MEC or will owe a penalty that is the greater of a flat dollar amount ($695) or 2.5% of income. Families pay half the penalty amount for children, up to a family cap of three times the annual flat dollar amount.
Employer Reporting Obligations
- Employers with CA resident employees are obligated to provide the same data as required under ACA Section 6055.
- Fully-insured plans may rely on their insurer to report to the State, but the employer is still responsible should insurer fail to report.
- Self-insured plans are required to report their own data to the State.
$50 penalty per individual for reporting failures.
Reporting Deadline
- By March 31 each year.
Process for Filing
- Self-insured plans must report using federal Form 1094-C and 1095-C for each individual enrolled. Fully-insured plans can rely on insurer to report information about each enrollee. Employers with greater than 250 informational returns must file electronically through the CA FTB file exchange. See the CA FTB information reporting page for more information and instructions.
Massachesetts
Important Dates
- Mandate effective starting in 2006 (prior to the ACA) with annual reporting due each January 31.
State Guidance
See Mass.gov Health Care Reform page for information on the mandate and reporting using Form MA 1099-HC.
Individual Mandate Penalties
MA residents over 18 must have coverage as long as it is considered affordable under the schedule set by the Massachusetts Health Connector.
Penalties vary depending on income, age, and family size – but can be no more than half the lowest priced individual plan available through the state exchange.
Employer Reporting Obligations
Form 1099-HC must be distributed to covered MA residents and report this information to the MA Department of Revenue (DOR). See the Mass.gov FAQs for Employers.
Most insurance companies and TPAs prepare, distribute, and file with the DOR on behalf of employers.
Reporting Deadline
- By January 31 each year.
Process for Filing
Most carriers and TPAs will prepare, distribute to MA employees, and file with the DOR on behalf of plan sponsors. See the Mass.gov FAQs for Employers for more information.
New Jersey
Important Dates
Mandate effective in 2019 with annual reporting due each March 31.
State Guidance
Individual Mandate Penalties
NJ residents must have MEC or will owe a penalty that is the greater of a flat dollar amount ($695) or 2.5% of income. Families pay half the penalty amount for children, up to a family cap of three times the annual flat dollar amount.
Employer Reporting Obligations
Employers with NJ resident employees are obligated to provide the same data as required under ACA Section 6055.
Fully-insured plans may rely on their insurer to report to the State, but the employer is still responsible should insurer fail to report.
Self-insured plans are required to report their own data to the State.
Reporting Deadline
By March 31 each year.
Process for Filing
Self-insured plans must report using NJ-1095 forms or federal 1095-B/C forms. Fully insured plans can rely on insurer to report information about each NJ resident enrollee. Submit forms using the NJ e-file system.
Vermont
Important Dates
Mandate effective starting in 2020.
Currently no state specific reporting obligations.
State Guidance
VT Individual Mandate law was signed on May 28, 2018. See the VT Individual Mandate FAQ page.
Individual Mandate Penalties
VT residents are required to have MEC.
Currently there is no penalty for failing to have coverage.
Employer Reporting Obligations
- No employer reporting obligations.
- VT law provides the state will impose employer reporting obligations, similar to ACA Section 6055, in the event the federal 6055 reporting obligations are suspended or eliminated.
Reporting Deadline
No employer reporting required.
Process for Filing
No employer reporting required.
Rhode Island
Important Dates
Mandate effective starting in 2020 with reporting due each January 31. For 2021 tax year reporting, State Advisory 2021-45 extended the deadline to March 31, 2022.
State Guidance
See RI Health Coverage Mandate webpage. See also the Summary of Legislative Changes pages 22-26.
Individual Mandate Penalties
RI residents must have MEC or will owe a penalty that is the greater of a flat dollar amount ($695) or 2.5% of income. Families pay half the penalty amount for children, up to a family cap of three times the annual flat dollar amount. Also, the penalty is capped at the RI statewide average premium for bronze-level plans offered through the RI Exchange.
Penalty will not be assessed for any tax year in which the ACA’s premium tax credits become unavailable or if the federal individual mandate goes back into effect.
Employer Reporting Obligations
Employers are required to provide the same data and may use the same federal forms as required under ACA Section 6055.
Reporting Deadline
By January 31 each year.
For 2021 tax year reporting, State Advisory 2021-45 extended the deadline to March 31, 2022.
Process for Filing
- Submit forms using portal link on RI Division of Taxation webpage. May use same federal Forms 1095-B or 1095-C that are submitted to the IRS (or other forms or file formats that provide the same information) for each individual enrolled.
District of Columbia
Important Dates
Mandate effective starting in 2019 with annual reporting generally due by April 30 each year (i.e., 30 days after IRS March 31 deadline for submitting 1095-B or 1095-C).
State Guidance
The Individual Tax Payer Health Insurance Responsibility Requirement was signed into law June 26, 2018. See DC Health Link and OTR Notice 2020-04 for annual reporting information and guidance.
Individual Mandate Penalties
DC residents must have MEC or will owe a penalty that is the greater of a flat dollar amount ($695) or 2.5% of income. Families pay half the penalty amount for children, up to a family cap of three times the annual flat dollar amount.
Employer Reporting Obligations
Employers that provide minimum essential coverage to DC residents must sign up and file returns with the Office of Tax and Revenue (OTR) using the same ACA Section 6055 forms filed with the IRS.
Currently there are no employer penalties for failing to report to DC.
Reporting Deadline
Report annually within 30 days after IRS deadline for submitting 1095-Bs or 1095-Cs, including any extensions granted by the IRS.
Process for Filing
- 1094/5-B and 1094/5-C forms must be uploaded through MyTax.DC.gov.
