Multiple states and jurisdictions have enacted requirements for individuals to maintain minimum essential coverage, such as coverage under an employer-sponsored group health plan, along with related employer reporting obligations. These reporting obligations are in addition to those required by the Patient Protection and Affordable Care Act ("ACA"). Employers operating in these jurisdictions should ensure they are prepared to report offers of coverage for federal and state purposes.
California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington, D.C. (the "States") have adopted requirements that individuals maintain minimum essential coverage. In most of these jurisdictions, a penalty may apply if an individual fails to maintain minimum essential coverage. Massachusetts' requirements became effective in 2007. The requirements for New Jersey and Washington, D.C., became effective January 1, 2019. The California, Rhode Island, and Vermont requirements become effective January 1, 2020.
Each State maintains specific deadlines for furnishing the forms to individuals and filing them with the State. Penalties may apply if an employer fails to file/ furnish the required forms.
To help enforce the minimum essential coverage requirements, employers are generally required to report offers of coverage to the State and to individuals. In general, each State except Vermont and Massachusetts use the ACA forms (e.g., Forms 1094- C and 1095-C) to report offers of coverage. Massachusetts uses Form MA 1099-HC, while individuals in Vermont report coverage on their individual state income tax returns. Each Sate maintains specific deadlines for furnishing the forms to individuals and filing them with the State. Penalties may apply if an employer fails to file/furnish the required forms.
Employers operating in Massachusetts, New Jersey, or Washington, D.C. should ensure they have processes and procedures in place to file and furnish the correct forms by the applicable deadlines. Employers may need to amend their contracts with the vendor that provides ACA reporting services to add State-level reporting services. When reporting offers of coverage to a specific State, employers should ensure they only report information for individuals who are subject to that State's reporting requirement. Employers should begin preparing for reporting 2020 offers of coverage for California and Rhode Island, in addition to Massachusetts, New Jersey, and Washington, D.C. If you need any assistance with reporting offers of coverage under the ACA or State requirements or working with your current vendor to add State-level reporting services, please contact a member of the Kutak Rock Employee Benefits Practice Group.
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