Does Your Company Need to Comply with ACA State Individual Mandates?
The IRS extended the deadline for businesses to distribute copies of Form 1095-C to their employees and recipients, however, that is not true for every state.
Employers that sponsor health insurance coverage for their employees are required to follow certain requirements for the federal government, however, there are several states that have implemented their own requirements. Failing to meet these requirements on a state level will become a problem for businesses.
Here is what your company needs to be aware of when it comes to state-mandated ACA requirements.
What is an Individual Mandate?
As you may recall, there used to be a federal individual mandate. This required any individual that failed to obtain health insurance coverage to be penalized and fined. While the federal government removed the individual mandate, several states have implemented their own individual mandate on the state level. This required residents of these states to prove that they are enrolled in acceptable health insurance coverage each year or pay a penalty.
What does this mean for Employers?
As an employer in a state with an individual mandate, your employees/recipients rely on you to provide them a copy of their 1095 as confirmation that they are enrolled in health insurance. The state agency will rely on you to file a copy of their 1095 (or MA 1099-HC if you are operating in Massachusetts). This assists the state in determining that a resident has met the individual mandate requirements and you as an employer, provided affordable coverage.
Which States Require ACA Reporting?
The following states have an individual mandate in place and require employers to complete ACA reporting at the state level:
- New Jersey: employers and insurance providers must file Forms 1094-B/C and 1095-B/C using the New Jersey W-2 filing system.
- District of Columbia: employers and insurance providers must file Forms 1094-B/C and 1095-B/C with the D.C office of Tax and Revenue
- Massachusetts: employers must file Forms MA 1099-HC with the Massachusetts Department of Revenue.
- California: employers and insurance providers are required to submit Forms 1095-B/C to the California Franchise Tax Board.
- Rhode Island: employers and insurance providers must submit their Forms 1095 B/C with the Rhode Island Division of Taxation.
- Vermont: employers are only required to report their ACA information to the state in the event that the federal ACA reporting requirements are eliminated.
What are the deadlines to file with these States?
- New Jersey: March 2, 2022 (Recipient Copy Deadline), March 31, 2022 (State Filing)
- District of Columbia: March 2, 2022 (Recipient Copy Deadline), April 30, 2022 (State Filing)
- Massachusetts: January 31, 2022 (Recipient Copy Deadline), March 31, 2022 (State Filing)
- California: January 31, 2022 (Recipient Copy Deadline), March 31, 2022 (State Filing)
- Rhode Island: January 31, 2022 (Recipient Copy Deadline), March 31, 2022 (State Filing)
- Vermont: Not announced
ACAwise offers a State-Filing Solution
If state filing is something you don’t want to worry about, ACAwise is your best choice! ACAwise software is designed to easily file with the state agencies.
The IRS recommends that you file electronically and some states flat out require it. With ACAwise you can e-file easily and accurately. Our clients take comfort in the extensive features and error checks within the ACAwise application.
Reach out to an ACAwise expert today to begin your state ACA reporting.