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Employers with operations in states who are Applicable Large Employers (ALE) (companies with 50 or more employees) have an additional state level ACA reporting requirement as part of the state’s Individual Mandate.
The Individual Mandate requires individuals to purchase qualifying health coverage or pay a tax penalty unless they qualify for an exemption. The Mandate encourages residents who might otherwise not buy health insurance to do so in order for health insurance to be more evenly spread amongst the pool of covered individuals, and not just the sick. Employers too have a part to play under the statewide Individual Mandate. Currently California, Massachusetts, New Jersey, Rhode Island, Vermont, and the District of Columbia have Individual Mandates in place and require employers to report their ACA information on a state level.
If you have employees working in these states, please contact your ACA reporting provider to see if they can assist with state level reporting.
ALE will use IRS forms 1094-C and 1095-C, (1095-B, and 1094-B if self-insured) to communicate health insurance information to the state, in addition to their federal responsibilities for annually furnishing these forms to full-time employees and to the IRS. The deadline is March 31 of the following reporting year.
For the 2020 tax year, self-funded employers in California will need to report on the employees that had health coverage throughout the year. The information must be furnished to employees by January 31, 2021 and filed with California’s Franchise Tax Board by March 31, 2021.
In DC, every “applicable entity that provides Minimum Essential Coverage to an individual during a calendar year” is required to submit an information return regarding such coverage to the Office of Tax and Revenue (OTR).
It also requires the applicable entity to submit a statement about the individual’s type of coverage.
These filing requirements, while similar to Federal filing requirements under the ACA, are not the same. All information returns are required by OTR to be filed electronically through MyTaxDC, as paper filings will not be accepted. The new tax guidance requirements for annual reports are due beginning June 30, 2020. For future reporting years, the deadline for employers to file is 30 days after the federal IRS filing deadline.
Massachusetts’s mandate has been in place since 2006. Employers do not have to report employee-level details to the state. The reporting is generally done by insurance carriers on behalf of individual employers. Employers must file by December 15th of the reporting year, much earlier than the federal filing deadline.
Currently, there are no additional ACA reporting requirements for employers. Employers will have new coverage reporting obligations to the state only if the federal ACA reporting requirements are eliminated.
Rhode Island’s individual penalty went into effect in January 2020. At this time, the only additional reporting requirements employers will need to comply with are the furnishing of healthcare receipts to employees beginning January 2021. The state has not disclosed whether the furnishing of health statements will be on the standard 1095-C or through a similar document. Employers with operations in Rhode Island should watch closely for updates.