Individual Mandate Reporting Updates
A handful of states enacted individual mandate laws that require residents to be covered by minimum essential coverage or pay a state tax. These states are California, District of Columbia, Massachusetts, New Jersey, Rhode Island and Vermont. Further, certain states require entities who provide MEC to file information returns to the relevant state revenue departments. Most of these states accept the Form 1094 and 1095 series used for federal MEC filing purposes.
Recently, the state revenue departments in California, District of Columbia and New Jersey issued updates relating to these reporting obligations.
As discussed in our prior Benefit Beat article, beginning January 1, 2020, California residents and their dependents (including spouse or domestic partner, and tax dependents) are required to obtain and maintain minimum essential coverage (MEC) on a monthly basis, unless they qualify for an exemption. The law requires entities providing MEC to file an information return to the California Franchise Tax Board (FTB) by March 31 each year. Entities required to report include employer/plan sponsors, licensed insurers, state health and welfare departments, and Covered California.
The FTB provides MEC reporting materials on its dedicated MEC information reporting webpage. MEC providers are required to send to the FTB the same forms used for their IRS reporting. Later this year, these forms will be able to be submitted electronically to the FTB. Additional technical specifications including drafts of the California instructions for filing the Forms 1094 and 1095 series are also available.
District of Columbia
The District of Columbia's individual mandate took effect in 2020 (see our prior Benefit Beat article). The DC Office of Tax and Revenue (OTR) issued updated health insurance reporting guidance for MEC providers. The District does not require applicable entities to furnish an additional annual statement of health coverage to employees and covered individuals in addition to the forms already required by federal law; compliance with the IRS requirement to furnish an annual statement of health coverage to employees or covered individuals (Form 1095-B or Form 1095-C) is sufficient. These entities should file the same information returns to the OTR that they file with the IRS. All information returns must be filed electronically with the OTR by uploading files through MyTax.DC.gov, using the OTR's prescribed layouts and file formats. Third-party service providers may file information returns on behalf of applicable entities.
For the tax year ending December 31, 2019, the deadline for uploading the information returns is June 30, 2020. For tax years beginning after December 31, 2019, the deadline is 30 days after the IRS deadline for submitting 1095-B or 1095-C forms, including any extensions granted by the IRS.
The New Jersey Department of Treasury issued updated reporting guidance for health coverage filings on March 19, 2020. Of particular note, the deadline for MEC providers to file their Form 1095s with the NJ Division of Taxation has been extended to May 15, 2020. Filers of 100 or more forms can use the Division of Revenue and Enterprise Services' (DORES) MFT SecureTransport service for submitting their forms. Those entities filing fewer than 100 forms can utilize a fillable Form NJ-1095 to file one form at a time.