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February 14, 2022
In the last two years, some jurisdictions have enacted their own individual mandate, similar to the repealed federal individual mandate that requires residents to have minimum essential coverage. These mandates also include various reporting requirements for employers to help the state reconcile which individuals were covered.
The Tax Cuts and Jobs Act of 2017 reduced the individual mandate penalty to $0.00 effective January 1, 2019. Worried about a negative impact in the individual health insurance market with no incentive for individuals to purchase health insurance policies, some states responded by looking into state-based “individual mandates.”
Massachusetts has had a state individual mandate (with associated employer reporting requirements) in effect for several years, and now four additional states (California, New Jersey, Rhode Island, and Vermont) and the District of Columbia have followed suit.
Minnesota, Hawaii, Maryland and Washington have followed in their footsteps but have no employer reporting requirements at this time.
Note that many states have similar, but not completely identical, requirements. Please refer to our opens in a new windowState Reporting Requirements Guide for reporting details, penalties and links to state websites.
Only employers offering coverage to a state resident must report
|State / |
|California||Franchise Tax |
|Federal Forms |
|Hawaii||No employer reporting requirements at this time.|
|Maryland||No employer reporting requirements at this time.|
|Massachusettes||Department of Revenue (DOR)||State Form MA 1099-HC|| |
|Minnesota||No employer reporting requirements at this time.|
|New Jersey||Department of Revenue and Enterprise Services (DORES) secure filing system||Accepts Federal Form 1095|| |
|Rhode Island||Division of Taxation (DOT)||Accepts Federal Form 1095|| |
|Vermont||No employer reporting requirements at this time.|
|Washington||No employer reporting requirements at this time.|
|Washington D.C.||Office of Tax and Revenue (OTR)||Accepts Federal Forms 1094/1095|| |
It is possible that additional states will pass individual mandates that will require employers to provide information about employer provided health insurance to employees and to the state. Parker, Smith & Feek will continue to monitor developments as they occur. Questions regarding tax liability of employers within a state should be directed to a tax attorney or other subject matter expert.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.