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While employers are actively preparing for Form 1094 transmissions to the IRS under the federal Affordable Care Act, employers in some states may also have state reporting requirements.
The federal Affordable Care Act requires almost all Americans to have health insurance coverage or pay a tax penalty. Starting with the 2019 plan year, the federal government reduced the tax penalty for not having health coverage to $0, thereby effectively eliminating the individual mandate.
Some states, worried about only the sickest residents enrolling in their health care exchanges, responded to the end of the federal individual health coverage mandate by implementing their own state-based individual health coverage requirements. These states require their residents to have qualifying health coverage or pay a fee with their state taxes.
Some of the states that implemented a state-based individual health coverage mandate also require employers and health insurers to report information about health coverage, much like what is required under the federal Affordable Care Act. Employers with employees in these states may have to comply with both state and federal ACA reporting requirements.
The following states impose health coverage and/or reporting obligations on employers:
- Massachusetts
- Massachusetts has had a health coverage mandate for many years, even before the Affordable Care Act.
- Employers must distribute Form MA 1099-HC to employees enrolled in their health plan.
- Employers must also file a health insurance disclosure statement with the state by December 15 of the reporting year.
- New Jersey
- New Jersey largely follows the federal ACA requirements for reporting health coverage. Form 1095-B/C distribution satisfies the NJ form furnishing requirement.
- Employers must file a coverage return with the state by March 31.
- District of Columbia
- Employers providing coverage to DC residents must distribute information to employees. The ACA 1095 Forms satisfy the DC information requirement.
- Reporting must be made to the District within 30 days after the due date for reporting ACA information to the IRS.
- California
- Starting in 2020, California required its residents to have health coverage or pay a penalty.
- Insurers and employers with self-funded health plans must provide documentation of health coverage to residents by January 31
- Insurers and employers with self-funded health plans must provide information to the state about coverage by March 31 (with no penalty if the information is provided by May 31).
- Rhode Island
- Distribution of the federal ACA 1095 Forms satisfies Rhode Island’s reporting requirement.
- Information about coverage and offers of coverage must be filed with the state by March 31.
- Vermont
- Vermont’s individual health coverage mandate started in 2020.
- There are presently no employer distribution or reporting requirements.
Employers who employ or cover individuals who reside in any of the states above should review state reporting and form distribution requirements. BAS can help with meeting state ACA mandates. For information about BAS’ State Affordable Care Act data collection and form distribution services, contact your account manager or Solutions@basusa.com.
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