Health Insurance Mandates by State

Just when you thought ACA reporting for employers couldn’t get more complex… some states are now requiring ACA-like employer reporting at the state level as well.

What’s the Situation?

With the individual mandate effectively being moot on the federal level as of 2019, some states are now creating their own type of individual mandate, requiring individuals to have health insurance or risk a penalty – effectively re-instating the individual mandate within their state. As a result, some (or all) employers will be required to do ACA-like state reporting and filing to prove that their employee was insured (or not). The expectation is that even if the federal individual mandate is modified or permanently eliminated, these states will uphold their own requirements.

For the 2020 tax year, the following “states” require an employer filing: New Jersey, the District of Columbia, California, and Rhode Island. Other states have passed legislation but do not require employer reporting.

Understanding these state requirements can be challenging:

  • Each state may define the employers that need to report differently.
  • Each state is defining reportable employees differently.
  • Non-residents need to be excluded from the files to prevent submitting unnecessary (private!) information.
  • Each state determines how the data should be provided.
  • Each state will have different due dates for reporting.

What to watch out for with 2020 Reporting

New Jersey

If you are U.S. employer who offered health coverage to a New Jersey resident that resided in New Jersey for at least 15 days during 2020 – regardless of where your organization is located – there is a state level employer reporting requirement to file ACA-like forms ot the state of New Jersey by March 31, 2021.

The New Jersey Health Insurance Market Preservation Act (Market Preservation Act) – that re-instates the individual mandate on a state level – requires coverage providers to report to verify health coverage information supplied by individual payers of New Jersey’s Income Tax.

What this means for you…

All employers must complete the following requirements:

    • By March 31, 2021, provide the New Jersey Division of Taxation with a 1095-C health coverage form for each primary enrollee who was a New Jersey resident and to whom the filer provided minimum essential coverage in 2019. This applies to both part-year and full-year New Jersey residents. For 1095-C filing purposes, a part-year resident is a primary enrollee who lived in New Jersey for at least 15 days in any month.
    • Ensure that New Jersey receives the appropriate 1095-C form. Use the 1095-C forms that the IRS has posted for the 2020 Tax Year.
    • Ensure that each primary enrollee who was a New Jersey resident or part-year New Jersey resident in 2020 receives at least one 1095-C form that includes health coverage information. Sending a single 1095 to each primary enrollee is sufficient for both state and federal purposes. You do not have to send separate 1095-C forms to spouses, dependents, or adult children of primary enrollees.
    • Meet the March 2, 2021 deadline for sending 1095-Cs to primary enrollees. No deadline extension is expected.

If you are a fully insured employer, the same reporting requirements above apply, but your insurance carrier can file this information on your behalf. You should:

    • Contact your insurer or multi-employer plan to discuss New Jersey’s 1095-C filing requirements in advance of filing deadlines.
    • Confirm that your insurer or multi-employer plan will file the required forms and meet the applicable deadlines.
    • Understand that you may share liability if your insurer or multi-employer plan does not file the required 1095-C forms on time.

Only electronic filing is supported and can be done using the Division of Revenue and Enterprise Services’ (DORES) MFT SecureTransport service. There is no paper filing option available. Currently, there is no employer penalty in place for not filing, but there most likely will be one after the state has finished reviewing, and it will be posted as soon as they finalize the details.

Integrity Data offers state filing services for New Jersey.

District of Columbia

DC’s mandate is due April 30th, 2021 for the 2020 tax year.

DC requires fully insured and self-insured to file with the state.
Unlike New Jersey, DC’s residency is ANY TIME during calendar 2020, not 15 days as in NJ.

Filing will take place on the mytax.dc.gov platform. Mailing in paper forms is also NOT an option. There is also no current employer penalty in place for not filing, but penalties are expected in the future.

DC the District of Columbia State Filing Service Individual Health Insurance Image

Califonia

The California mandate went into effect January 1, 2020.  The state has a method by which to report coverage managed by the California Franchise Tax Board.  Doing so requires an account be established and enrollment be processed for electronic filing.  The information returns are due March 31, 2021.  Integrity Data has established its account with California FTB and obtained its TCC license for transmitting files on behalf of clients.  As a subscriber to the Integrity State Filing service, you will not need to sign up for California’s burdensome process of submitting forms on your own.

Rhode Island

The Rhode Island mandate went into effect January 1, 2020. The Division of Taxation (Department of Revenue) for Rhode Island is managing the state mandated filing for those employers who need to file.  The deadline is March 31, 2021.  Unlike the other states, the file upload process may require the following be specified for the company: Your company’s information, your contact information, and information about the file.   Integrity Data is still communicating with Rhode Island to determine whether “submission on behalf of” will be permitted or whether each entity must submit on its own file and receive their own receipt.  Even if each entity is require to submit their own file, Integrity will provide the information to you needed to do so including:  1) the file to upload and 2) the Web Address to visit to do it.

Other States

Massachusetts and Vermont have both passed mandates, but there is either no reporting requirement in one situation or no specific requirements placed on employers in the other.