Compliance Q&A: State Individual Mandate Reporting Requirements
I thought Affordable Care Act (ACA) reporting was a federal requirement and that individuals are no longer required to have health insurance to avoid penalties under the individual mandate, but I’ve heard that coverage and reporting may be required in some states. Is this true?
While health insurance is no longer required at the federal level, an increasing number of jurisdictions, including California, Massachusetts, New Jersey, Rhode Island and Washington, D.C., have enacted their own individual mandates requiring residents to maintain qualifying health coverage or face a state tax penalty. What this means for employers is that besides any federal reporting obligations you may have under the Affordable Care Act, you may have state reporting requirements as well.
The ACA created a number of federal reporting requirements for employers and health plans, which (among other things) provide the government with the information necessary to administer the ACA mandates, such as the large employer shared responsibility penalty and the individual mandate.
The ACAs’ individual mandate became effective in 2014 and requires individuals to obtain minimum essential health coverage (MEC) each month of the year (unless an exception applies) or pay a penalty. However, as of Jan. 1, 2019, the Tax Cuts and Jobs Act reduced the applicable penalty for failing to have coverage to zero. While individuals are still technically required by federal law to have MEC or qualify for a coverage exemption, they are no longer required to pay a penalty if they do not have MEC for part or all of the year, effectively abolishing the federal individual mandate.
While health insurance is no longer practically required at the federal level, an increasing number of states have enacted their own individual mandates, which largely mirror federal requirements and come with their own state tax reporting requirements and penalties. Many of the state health coverage reporting requirements are similar to the ACA’s reporting requirements under Internal Revenue Code Sections 6055 and 6056 but have their own state-enforced deadlines as outlined in the table below:
Jurisdiction |
|
Distribution to Employees |
Reporting to the State |
---|---|---|---|
What: |
Federal 1095-B or 1095-C |
Federal 1094/1095-B or 1094/1095-C |
|
When: |
January 31, 2025 |
March 31, 2025 (no penalty through May 31, 2025) |
|
What: |
|
||
When: |
|
December 15, 2024 |
|
What: |
Form MA 1099-HC |
Form MA 1099-HC |
|
When: |
January 31, 2025 |
January 31, 2025 |
|
What: |
Federal 1095-B or 1095-C or State NJ-1095 |
Federal 1095-B or 1095-C or State NJ-1095 |
|
When: |
March 3, 2025 |
March 31, 2025 |
|
What: |
Federal 1095-B or 1095-C |
Federal 1095-B or 1095-C or State File |
|
When: |
March 3, 2025 |
March 31, 2025 |
|
Individual Mandate but currently no employer state reporting requirement |
|||
What: |
Federal 1095-B or 1095-C |
Federal 1094/1095-B or 1094/1095-C |
|
When: |
March 3, 2025 |
April 30, 2025 |
Employers should proactively assess whether they have employees residing in a state with an individual mandate and carefully determine whether they have state-specific coverage and reporting obligations.
For fully-insured plans, the carrier or insurer will often complete this reporting on behalf of the employer. However, since it is ultimately the employer’s responsibility to ensure compliance, employers should confirm the state’s specific requirements and the insurer’s role well in advance of the filing deadlines. Self-funded employers are generally responsible for their own state reporting; although, some Third-Party Administrators (TPAs) may be willing to assist with the process.
As more states follow suit in enacting state individual mandates, employers should continue to be alert for additional guidance.
Authored by Christy Showalter, JD
McGriff EB Compliance Officer
Updated 10/21/2024