State-Level ACA Reporting is here – are you ready?

By Ruby Sanchez, Client Manager

What’s going on with the ACA?

The Individual Mandate provision of the Affordable Care Act (ACA) was reduced to $0 effective January 1, 2019. This essentially made the individual requirement for obtaining health insurance obsolete at the Federal level.

The state of New Jersey responded by enacting the “New Jersey Health Insurance Market Preservation Act.”  This mandate restores the individual requirement for taxpayers to carry minimum essential coverage (MEC) as defined by the ACA. Failure to comply could subject New Jersey residents to a penalty from the State.

On the surface, it may seem that this mandate only impacts individual residents of New Jersey. However, employers with employees in New Jersey will now have to comply with state-level reporting, in addition to their current ACA reporting requirements to the IRS.

What does this mean for employers?

Any employer who withholds or remits New Jersey Gross Income Tax for New Jersey residents will have to file with the state of New Jersey if it is an Applicable Large Employer (ALE). Simply put, if an employer files forms 1094-C and 1095-C (1094-B and 1095-B if self-insured) for residents of New Jersey with the IRS, then the employer must file these same forms again with the state of New Jersey for 2019.

Employers based outside of the state of New Jersey who employ New Jersey residents are expected to comply with this reporting requirement as well.

Important Employer Deadlines:

Jan 31, 2020: deadline to furnish forms 1095-B/C to employees

Feb 15, 2020: file forms 1094-B/C and 1095-B/C with the state of New Jersey

Feb 28, 2020: file forms 1094-B/C and 1095-B/C with IRS (if paper filing)

Mar 31, 2020: file forms 1094-B/C and 1095-B/C with IRS (if electronic filing)

Now what?

Now that New Jersey requires a separate form of healthcare reporting it will be interesting to see which states follow suit and establish separate reporting requirements. Employers should be prepared to comply with healthcare reporting requirements at both the Federal and state level. Failure to comply with two separate offices can be a costly mistake. The IRS alone is set to issue over $228 billion dollars in ACA penalty assessments by 2026.

CXC Solutions is poised to handle these rapid changes in the compliance reporting landscape. If you need assistance with ACA reporting at the state or federal level please contact us at info@cxcsolutions.com.