Author: Dan Brady, Regulatory and Legislative Specialist, Hays Companies

Recently, several states have enacted legislation mirroring the individual mandate under the Affordable Care Act (ACA). While Congress has repealed the IRS penalties associated with the individual federal mandate, certain states have taken it upon themselves to implement their own mandates requiring residents to maintain qualifying health coverage.

So, what does this mean for employers?

Employers who have employees working in states that have enacted individual mandate requirements will likely face increased reporting responsibilities in addition to responsibilities at the federal ACA level. Employers located in areas without the mandate should also be conscious of employees residing within the specified states, which can potentially give rise to reporting obligations. Additional information on state reporting requirements can be found at the links provided below.

California

Every entity that provides minimum essential coverage (MEC) is expected to satisfy the state individual mandate reporting requirement. Entities may satisfy the requirement by providing the same information reported to the IRS under Section 6055. The reporting deadline will be March 31 of each year. Applicable entities may contract with third-party service providers, including insurance carriers, to provide the required reporting.

Effective Date: January 1, 2020 

Massachusetts

Form MA 1099-HC to residents of the state, regardless of the number of employees covered by the health plan. Most insurance carriers and some third-party administrators will issue the form on behalf of employers and send the state a report listing all the Form MA 1099-HCs they issued. Employers issuing the form directly to employees will need to file a report directly with the state.

Source

HIRD Reporting:

Employers with six or more employees during the past 12 months preceding the December 15 due date are required to complete and file the HIRD form with the Massachusetts Department of Revenue. The HIRD form requires employers to provide detailed employer-level information regarding each of the health plan options offered to employees who are Massachusetts residents.

Source

New Jersey

New Jersey’s individual health coverage mandate requires third-party reporting to verify health coverage information supplied by individual payers of New Jersey’s Income Tax. The requirement includes both in-state and out-of-state employers who provide health coverage to New Jersey residents. Insurers, government agencies, exchanges, multiemployer plans, and all others responsible for reporting MEC on behalf of New Jersey residents also must file the required information with the State. The deadline for state reporting is March 31 of the calendar year.

Effective Date: January 1, 2019

Washington D.C.

The District law requires applicable entities that provide minimum essential coverage (MEC) to individuals during a calendar year to submit coverage information to the Office of Tax and Revenue (OTR). Applicable entities include employers and employment-based health plan sponsors, including governmental agencies, that covered at least 50 full-time employees, including at least one employee who was a District resident, during the applicable calendar year. Applicable entities will file the same information they file with the IRS and may contract with a third-party, including an insurance carrier, to provide the information on their behalf. The first report for the 2019 tax year is due June 30, 2020. For tax years beginning after December 31, 2019, the state deadline is 30 days after the IRS deadline for submitting 1095-B or 1095-C forms.

Effective Date: January 1, 2019

Rhode Island

Employers and health plan sponsors that provide MEC to an individual during a calendar year are required to file a return with the Division of Taxation and provide a return to the individual. Information contained in the federal Form 1095 will meet the Rhode Island reporting requirement. Applicable entities may contract with third-party service providers and insurance carriers to provide the returns.

Effective Date: January 1, 2020

Vermont

Providers of MEC will only be required to report information in the event that the federal reporting requirement under Section 6055 is suspended or eliminated for the taxable year.

Effective Date: January 1, 2020

In Addition

Several other states, including Connecticut, Hawaii, Maryland, Minnesota and Washington are all considering statewide individual mandates that will likely include employer reporting requirements.

Hays Compliance recommends that employers with questions regarding specific state reporting requirements consult with legal counsel or a tax advisor familiar with the laws of the state in question.


This document is provided for general information purposes only and should not be considered legal or tax advice or legal or tax opinion on any specific facts or circumstances. Readers are urged to consult their legal counsel and tax advisor concerning any legal or tax questions that may arise.


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