The Affordable Care Act (ACA) state reporting requirements are critical for employers, especially those operating in states with individual mandates. Compliance extends beyond federal obligations — employers must also adhere to specific state rules to avoid penalties. This guide outlines the key reporting requirements for states with their own mandates, helping employers navigate this complex landscape.
Overview of ACA state reporting requirements
Several states have implemented individual mandates requiring residents to maintain health coverage. Employers in these states must comply with additional reporting requirements, including filing specific forms with state agencies and providing the necessary documentation to employees.
Importance of compliance for employers
Failing to comply with state ACA reporting requirements can result in penalties, fines, and increased scrutiny from state authorities. Employers must stay updated on varying requirements and penalties to ensure compliance across all jurisdictions where their employees reside.
What states require ACA reporting? Plus state-specific requirements
California
Health coverage mandate: California requires residents to have minimum essential coverage (MEC).
Employer reporting obligations: Applicable Large Employers (ALEs) must file Forms 1094-C and 1095-C, reporting information on employees’ health coverage.
Penalties for non-compliance: Employers can face fines of $50 per individual for failing to report.
Process for filing: Employers must file electronically through California’s online system.
Massachusetts
Health coverage mandate: Known as “Romneycare,” Massachusetts requires residents to maintain Minimum Creditable Coverage (MCC).
Employer reporting obligations: Employers must file Form MA 1099-HC electronically through the MassTaxConnect portal and provide copies to employees.
Penalties for non-compliance: Penalties start at $50 per individual, with a cap of $50,000 per year.
New Jersey
Health coverage mandate: New Jersey mandates MEC for its residents, effective since 2019.
Employer reporting obligations: Employers must submit Forms 1095-A, 1095-B, or 1095-C to the New Jersey Division of Taxation and provide copies to employees.
Penalties for non-compliance: While specific penalties for employers are not yet detailed, it is crucial to adhere to requirements to avoid potential fines.
Rhode Island
Health coverage mandate: Rhode Island implemented its individual mandate following the repeal of the federal mandate penalties.
Employer reporting obligations: Employers must file state-specific forms, similar to federal requirements, and ensure compliance with local regulations.
Penalties for non-compliance: Failure to comply can result in penalties, though exact amounts can vary based on employer size and coverage status.
District of Columbia
Health coverage mandate: D.C. requires residents to hold MEC throughout the year.
Employer reporting obligations: ALEs must file Forms 1094 and 1095-B/C electronically with the D.C. Office of Tax and Revenue.
Penalties for non-compliance: The D.C. OTR has not published specific employer penalties, but non-compliance may lead to fines.
Vermont
Health coverage mandate: Vermont has an individual mandate but does not currently require employer-level reporting similar to other states. Employers should stay updated as state requirements may change.
Managing ACA state reporting requirements
Navigating ACA state reporting requirements is essential for avoiding penalties and maintaining compliance. Employers should stay informed of what states require ACA reporting, state-specific mandates, leverage available tools, and seek professional guidance when necessary. By staying proactive, employers can effectively manage their reporting obligations and ensure compliance across all relevant jurisdictions.
