The market has changed. With the removal of the Affordable Care Act’s (ACA) individual mandate penalty, a growing number of states have stepped in to enact their own state-based individual mandate, and more states are preparing to do so. Many of these require individuals to carry their own individual health insurance, and require employers to report on health benefits offered to individuals who reside in their state.
The requirements of these mandates can vary dramatically from one state to another, but employers with individuals who reside in multiple states, will need to comply with each of them. That’s why we created our eBook, “Your state-by-state guide to individual mandate expectations” to help guide you through managing your compliance expectations in states with individual mandate considerations.
What do state individual mandates mean for your company?
If your company operates in numerous states, each new individual mandate enacted adds a new level of complexity and penalty risk. Health e(fx) goes beyond the ACA and expand our reporting functionality to help employers comply with state individual mandates.
California
CALIFORNIA EMPLOYER REQUIREMENTS
- Individual mandate requires California residents to maintain health insurance.
- Employers must file Forms 1094 and 1095 to the state by March 31, 2021; correction files may be provided.
- All parts of Form 1095 and 1094-B forms are required.
- California states that certain parts of 1094-C are not required, specifically Part II, III, and IV, however the same Federal form 1094-C that is submitted to the IRS may be submitted to California.
- Deadline to furnish Form 1095-C to individuals remains January 31, 2021 with no extension.
- It’s important to note that California’s mandate also carries an employer penalty of $50 per individual who is not reported to the state, and these fines will grow on a case-by-case basis without a maximum ceiling.
- California requires reporting for self-funded and fully insured populations. However, fully insured population reporting is typically submitted by the health plan. If the health plan does not submit to California, then the employer may be required to file. Employers should consult with their health plan carrier regarding whether state filing will be provided for their fully insured populations.
District of Columbia
DISTRICT OF COLUMBIA EMPLOYER REQUIREMENTS
- Individual mandate requires District residents to maintain health insurance.
- Employer reporting requirements apply when individuals reside in D.C.
- Employers are required to report annually, within 30 days after the IRS deadline for submitting 1095-B or 1095-C forms, including any extensions granted by the IRS (April 30, 2021).
- Firms providing health coverage to residents in D.C. are required to submit Forms 1094 and 1095-B and Forms 1094 and 1095-C to the D.C. Office of Tax and Revenue (OTR) in a .txt format (XML is not supported by D.C.); correction files may be provided.
- Employers must also provide applicable D.C. residents with furnished written statements of their coverage. This requirement can be considered satisfied if the employer is already providing individuals with a Form 1095-B or Form 1095-C by the March 2, 2021 deadline
- Employer penalty specifics have not been published at this time.
- D.C. requires reporting for self-funded and fully insured populations. However, fully insured population reporting is typically submitted by the health plan. If the health plan does not submit to D.C., then the employer may be required to file. Employers should consult with their health plan carrier regarding whether state filing will be provided for their fully insured populations.
Massachusetts
MASSACHUSETTS EMPLOYER REQUIREMENTS
- Massachusetts employer reporting is typically handled by health insurance providers, and Health e(fx) does not currently offer this service for this state.
- Massachusetts considers 15 or more days of coverage a month for reporting on the MA 1099-HC.
- Employee delivery of Form MA 1099-HC is due by January 31, 2021.
- State filing of Form MA 1099-HC is due to the MA Department of Revenue by January 31, 2021, corrections are required.
- Massachusetts requires data to be sent in an XML format (paper submission not allowed).
- Employer penalty: $50 for each unreported individual, maximum of $50k.
- Massachusetts requires reporting for self-funded and fully insured populations. However, fully insured population reporting is typically submitted by the health plan. If the health plan does not submit to Massachusetts, then the employer may be required to file. Employers should consult with their health plan carrier regarding whether state filing will be provided for their fully insured populations.
New Jersey
NEW JERSEY EMPLOYER REQUIREMENTS
- Individual mandate requires New Jersey residents to maintain health insurance.
- Employer reporting requirements apply when individuals reside in New Jersey.
- Employers are required to submit Forms 1095-C and 1094-C to the New Jersey Division of Taxation by March 31, 2021; corrections may be provided.
- Current technical requirements are similar to IRS (XML), but a major difference is the very small file size limitation.
- New Jersey’s mandate also carries an employer penalty of $50 per individual who is not reported to the state.
- New Jersey requires reporting for self-funded and fully insured populations. Employers typically file on behalf of self-funded groups for New Jersey. Employers should consult with their health plan carrier regarding whether state filing will be provided for their fully insured or multi-employer populations.
Rhode Island
RHODE ISLAND EMPLOYER REQUIREMENTS
- Individual mandate requires Rhode Island residents to maintain health insurance.
- Employer reporting requirements apply when individuals reside in Rhode Island.
- Employers must file Form 1095 to the Rhode Island Division of Taxation by March 31, 2021; corrections may be provided.
- Employee delivery of Form 1095 is due by March 2, 2021. Rhode Island has indicated that in future years employers are required to report annually by January 31.
- Employer penalty specifics have not been published at this time.
- Rhode Island requires reporting for self-funded and fully insured populations. However, fully insured population reporting is typically submitted by the health plan. If the health plan does not submit to Rhode Island, then the employer may be required to file. Employers should consult with their health plan carrier regarding whether state filing will be provided for their fully insured populations.
Vermont
State by State eBook
State by State eBook
These days the mandate lives on in several states, each of which has
enacted its own state-based individual mandate following the federal
repeal, and more states are preparing to do so. Yet these state-based
mandates offer new challenges and complexity for employers. Where
once companies had a single mandate to follow, they now are required
to adhere to each state-based mandate where their employees reside.
This can give rise to potentially costly misconceptions and errors.
Click here to download our State by State eBook.
Check out our most recent webinar to learn more about the new 2019 employer reporting requirements!
On our webinar, you’ll learn:
- What this means for employers that have employees or COBRA participants who reside in these states.
- How to avoid non-compliance penalties for each state mandate.
- How Health e(fx) is prepared to help you with New Jersey and Washington, D.C. 2019 filing.
Health e(fx) offers the industry’s leading health reform compliance and workforce analytics solution.
Gain peace of mind
Have confidence your state reporting is in the hands of the largest ACA technology provider trusted by top U.S. employers.
Make it easy
We remove the burden of state individual mandate requirements through a combined federal and state solution.
Adapt to change
Our highly flexible system adapts to state and federal changes, so you stay compliant through complex legislative change.