In addition to federal ACA filing, it’s important to remember that some states have implemented their own mandates that require reporting employee health care coverage directly with the state. Applicable Large Employers (ALE) must also provide copies of 1095-C forms to their employees.
Here are a few quick tips to help guide you through the ACA state reporting process.
- Where did my employees reside when coverage was offered? Where your employee lived during the calendar year will determine if you have a state reporting obligation, regardless of where your company is located. As the hiring landscape has evolved to support more remote employees, determining where you have additional ACA reporting obligations is more important than ever. If even one employee lived in a state that has an ACA reporting mandate, you will need to file Forms 1095-C with that state.
- Save your employees from state penalties. In California for example, failure to accurately report your employee’s health insurance coverage to the CA Franchise Tax Board could cost your employee a penalty of $800 per adult and $400 per dependent child. Individual mandate penalties in Washington D.C. can be equal to 2.5% of a person’s salary or up to $700 per individual. Avoid placing your employees in the difficult position of having to fight a state penalty by ensuring that you are correctly reporting their insurance coverage on time in each state you have obligations.
- Pay attention, deadlines vary. Speaking of timely reporting, missing an ACA reporting deadline can be costly. The IRS has begun implementing penalties for late and incorrect ACA reporting and many states are following suit. Filing on time is a key step in ACA compliance. The federal deadlines for tax year 2022 are as follows:
- February 28, 2023: Deadline for filing 1095-C forms on paper if you have less than 250 forms to file.
- March 2, 2023: Deadline to provide 1095-C form to each full-time employee.
- March 31, 2023: Deadline to file forms 1095-C and the 1094-C transmittal with the IRS electronically.
Here is a current list of the individual states that have state mandates or require some form of direct reporting of Affordable Care Act coverage information. You will notice how the deadlines in many cases vary from the federal deadlines:
The employer deadline for providing 1095-C forms to California employees who enrolled in coverage is January 31, 2023, and no extensions are available.
Employers must also report insurance information to the California Franchise Tax Board by March 31, 2023, only if not reported by their insurers.
The penalty for employers that fail to report is $50 for every individual who received health coverage. No penalty will apply if the return is filed on or before May 31, 2023.
The District of Columbia (D.C.) individual mandate, requiring residents to have qualifying coverage throughout the year, went into effect on January 1, 2019. The deadline for sending forms 1095-C to Washington D.C. employees is March 2, 2023.
April 30, 2023, is the 2022 ACA filing deadline for employers transmitting forms to the state agency. The D.C. reporting law applies to employers that provide Minimum Essential coverage to individuals. Employers should submit their healthcare information electronically, as paper filings are not accepted.
The Individual mandate penalties in D.C. are equal to 2.5% of salary or $700 per taxpayer.
The State of New Jersey’s individual mandate, requiring residents to have qualifying coverage throughout the year, went into effect on January 1, 2019. Employers with employees that are New Jersey residents for full year or part-year must receive at least one 1095-C form that includes health coverage information by March 2, 2023. A part-year resident is a primary enrollee who was living in New Jersey for at least 15 days in any month.
By March 31, 2023, employers must submit 1095-C health coverage forms to the New Jersey Division of Taxation.
New Jersey individual mandate penalties are based on income and family size. Individual penalties for tax year 2020 ranged between min $695 and max $3,012.
The tax year 2022 ACA deadline for 1095-C and applicable 1095-B forms for employers with employees in Rhode Island is March 2, 2023.
The ACA filing deadline for sending 1094-C and 1095-C forms to the state is March 31, 2023. These deadlines were permanently extended in November of 2022.
Rhode Island individual mandate penalties are equal to 2.5% of salary or $695 per taxpayer and $347 per child.
States to watch:
- Vermont – Despite the state’s Individual Mandate requiring residents to obtain coverage, there are still no additional ACA reporting requirements for employers.
- Other states with pending legislation: Connecticut, Hawaii, Maryland, Minnesota and Washington.
The information above is a quick snapshot of what you’ll need to know to meet your ACA direct state reporting obligations for tax year 2022. eFileMyforms can help with both your federal and direct state ACA filing in CA, DC, NJ, RI. Visit our ACA Reporting Services page to learn more.