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The state of New Jersey has issued updated guidance regarding state-level ACA health insurance reporting.
Employers, regardless of size, who offer Minimum Essential Coverage to employees will need to file their ACA information with the state. This requirement is in addition to those of the ACA’s Employer Mandate, which applies only to Applicable Large Employers, (organizations with 50 or more full-time employees and full-time equivalent employees) who are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
Employers with operations in New Jersey should adhere to the updated reporting instructions, as stated in the official state of New Jersey webpage.
First, employers need to furnish the 1095-C health coverage verification forms to each primary enrollee, to whom they provide Minimum Essential Coverage to during the 2019 tax year, by the deadline of March 2.
Secondly, in addition to furnishing, employers need to file the 1095-C schedules for full-year and part-year primary enrollees with the state of New Jersey, by March 31. Employers will have to submit their state-level ACA reporting information using New Jersey’s system for filing W-2 forms.
The instructions note that the requirement to furnish and file the 1095-C schedules to primary enrollees applies to both full-year and part-year New Jersey state residents. The state defines a part-year resident as anyone who lived in the state of New Jersey for at least 15 days in any month during the 2019 tax year.
Under New Jersey’s individual mandate, residents of the state must obtain health insurance that meets Minimum Essential Coverage or face an individual tax penalty as high as $3,012. New Jersey joins Massachusetts, Vermont, California, Rhode Island and the District of Columbia in passing their own state-level individual mandate.
As more states pass their own individual mandates, expect healthcare regulations to become more complicated and fragmented, adding new layers of complexity to what employers face in addressing compliance with the federal ACA.
The IRS is actively enforcing the ACA’s Employer Mandate by issuing penalty notices under IRC Section 4980H in the form of Letter 226J. The agency is projected to continue issuing Letter 226J penalty assessments for the 2017 tax year through up to fall 2020.
Employers that want to avoid penalties from the IRS should undertake an ACA Penalty Risk Assessment to ensure that they are ACA compliant.
