State-Specific Individual Mandate Rules and Annual Information Reporting Requirements

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 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

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

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

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

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.
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