By now, most employers have a pretty good handle on their IRS ACA reporting obligations. However, employers may not realize that several states have recently adopted their own version of health coverage reporting that they might have to contend with.
In response to the ACA’s $0 individual mandate penalty for 2019, and in an effort to preserve the original intent of the ACA, a few states have adopted their own individual mandates. These state-specific mandates require residents to carry minimum essential coverage or pay a state tax penalty. Even though these states won’t impose their own employer mandate, they will now require employers to report whether their employees have the appropriate level of health insurance coverage.
The reporting requirement applies to employees who live in one of these particular states, rather than the state where the employer is located or where the individual works. This means employers will need to pay close attention to where employees reside.
The most immediate employer reporting requirements relate to New Jersey and Washington, D.C., which both require state-specific reporting for employees’ 2019 health coverage:
Any sized employers (either in-state or out-of-state) who provide health coverage to employees must ensure that the state of New Jersey receives any required 1095 form for each New Jersey resident. The deadline for filing for 2019 coverage with the state is March 31, 2020.
Employers that covered at least 50 full-time employees, including at least one employee who was a District resident, during the 2019 calendar year are required to file the applicable 1095 forms with the District by June 30, 2020. In future years, the deadline will be 30 days after the IRS deadline.
There are other states with similar reporting requirements which will take effect in 2021. Those states include Vermont, California and Rhode Island.
Therefore, employers that have employees living in these states and/or in D.C. should make preparations to ensure filings are not only sent to the IRS, but also to the respective state agencies.