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When the federal Affordable Care Act (ACA) eliminated the individual mandate penalty, several states responded by implementing their own individual health coverage requirements to ensure residents maintain qualifying health insurance. These state mandates often come with reporting obligations that employers and health insurers must meet. As employers prepare for federal ACA reporting, it’s important to also understand the state-specific rules that may apply.

The Federal Context

The ACA requires most Americans to have health insurance or face a penalty. However, Congress reduced the federal penalty to $0, effectively nullifying the individual mandate at the national level. Concerned about the potential negative impact on their health care exchanges, some states enacted their own individual mandates to maintain coverage levels and protect against adverse selection.

State-Level Individual Mandates and Reporting Requirements

States with individual health coverage mandates generally require employers to furnish health coverage information to employees and report coverage details to state authorities. Below is a breakdown of state reporting requirements for the 2024 reporting year:

California

• Deadlines:
  • January 31, 2025: Provide information returns to individuals.
  • March 31, 2025: File returns electronically with the California Franchise Tax Board.
• Action Items:
  • Employers with self-funded major medical plans: Provide Form 1095-C (large employers) or Form 1095-B (small employers) to residents and file with the California Franchise Tax Board.
  • Employers with fully insured plans: Confirm the insurer is filing Form 1095-B with the California Franchise Tax Board.

District of Columbia

• Deadlines:
  • March 3, 2025: Provide information returns to individuals.
  • April 30, 2025: File returns electronically with the DC Office of Tax and Revenue.
• Action Items:
• Employers with self-funded major medical plans: Provide Form 1095-C or Form 1095-B to residents and file with the DC Office of Tax and Revenue.
  • Large employers with fully insured plans: Provide Form 1095-C to residents and file with the DC Office of Tax and Revenue.
  • Small employers with fully insured plans: No reporting requirement.

Massachusetts

• Deadlines:
  • January 31, 2025: Provide Form MA 1099-HC to individuals.
  • January 31, 2025: File Form MA 1099-HC with the Massachusetts Department of Revenue.
• Action Items:
  • Distribute Form MA 1099-HC to employees enrolled in the employer’s health plan.
  • File Form MA 1099-HC with the state.

New Jersey

• Deadlines:
  • March 3, 2025: Provide information returns to individuals.
  • March 31, 2025: File returns electronically with the New Jersey Division of Taxation.
• Action Items:
  • Employers with self-funded plans: Provide Form 1095-C or Form 1095-B to residents and file with the state.
  • Employers with fully insured plans: Confirm the insurer is filing Form 1095-B with the state.

Rhode Island

• Deadlines:
  • March 3, 2025: Provide information returns to individuals.
  • March 31, 2025: File returns electronically with the Rhode Island Division of Taxation.
• Action Items:
• Employers with self-funded plans: Provide Form 1095-C or Form 1095-B to residents and file with the state.
• Employers with fully insured plans: Confirm the insurer is filing Form 1095-B with the state.

Vermont

• Vermont has an individual mandate but currently imposes no reporting requirements on employers or insurers.

Federal vs. State Reporting

Employers with employees in states with individual mandates must navigate both federal and state requirements. For most states, the federal ACA forms (1095-B and 1095-C) satisfy individual reporting obligations. However, employers must meet state-specific deadlines and file the required information with state tax authorities.

Key Considerations for Employers

• Review State Requirements: Employers should identify where their employees reside and confirm applicable state-specific reporting rules.
• Coordinate with Insurers: Employers with fully insured plans must confirm their insurer is filing required forms with the relevant state authorities.
• Monitor Filing Deadlines: Ensure timely distribution of forms to employees and electronic filing with state tax agencies.

Electronic Posting and State Compliance

Recent federal guidance allows employers to post the availability of 1095-C forms electronically instead of distributing paper copies to employees. However, this option may not apply to state-level reporting requirements unless explicitly stated in the state's regulations. Employers must continue to meet state-specific obligations to furnish paper forms or comply with other prescribed methods.

By staying informed and proactive, employers can ensure compliance with both federal and state ACA reporting requirements.

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