Employer Obligations Under State Individual Health Care Mandates

Employer Obligations Under State Individual Health Care Mandates

States began passing individual mandates after Congress reduced the federal individual mandate under the Affordable Care Act (ACA) to $0, effective in 2019.

California, New Jersey, Massachusetts, Vermont and Washington D.C. have passed individual mandates, which require their residents to maintain minimum essential health care coverage or pay a tax penalty.

New Jersey Reporting is now effective

In Brief:  New Jersey employers and out-of-state employers that withhold and remit New Jersey Gross Income Tax for New Jersey residents must submit returns to the state and distribute statements to employees in early 2020.

BenefitScape Cloud can take your Federal ACA filing and eFile it to New Jersey.

No additional effort on your behalf, its that easy. The result 100% NJ Compliance with no additional work!

Beginning January 1, 2019, New Jersey adopted its own individual health insurance mandate, called the New Jersey Health Insurance Market Preservation Act (“NJHIMPA”).  The NJHIMPA requires, with a few exemptions, New Jersey residents to have minimum essential health coverage or pay a tax penalty.

  • New Jersey organizations must verify the health coverage they provide to NJ Residents. To make employer reporting “easier”, the NJ requirement piggybacks onto the Federal ACA Reporting. In brief, it’s a two for one; by fulfilling the Federal requirements New Jersey organizations satisfy the NJ requirements.
  • New Jersey provides an official website with guidance on these filing requirements.

What follows is a brief guide to what you as an employer must do in connection with the New Jersey requirements. BenefitScape is prepared to assist you in this task.

  • Who must File? Employers and all other providers of Minimum Essential Coverage to New Jersey residents (full or part time) must send health-care coverage returns to the State for the 2019 Tax Year.

o   This includes Insurers, government agencies, multiemployer plans, and all others responsible for reporting Minimum Essential Coverage to New Jersey residents also must file the required information with the State.

  • Must only New Jersey Residents be reported? The State has provided additional guidance encouraging companies to send data pertaining only to New Jersey full-year and part-year residents. However, for ease of filing, New Jersey will accept the same 1094/1095 data files sent to the IRS, even if they include data about individuals who are not residents of New Jersey. In other words, the State will accept “bulk” files.

o   ACA TIP: This “bulk” is certainly easier but may be a dangerous choice. BenefitScape will take client XML data and send only NJ residents to the state. We also have a system in place to add employees overlooked in the initial analysis.

  • What Forms must be filed?  The State requires that Employers must provide BOTH New Jersey taxpayers and the State with the same Forms 1094 and 1095 health-care coverage information they send to the IRS.

o   Depending on the coverage provided following forms can be filed 2019 Tax Year will accept 1095A, 1094-B, 1094-C, 1095-B, and 1095-C.

  • How must the Forms be filed? Insurers or Employers are able to provide confidential or sensitive data to the State of New Jersey using the Division of Revenue and Enterprise Services’ (DORES) MFT Secure Transport service. (NJ system for filing of W-2 forms.) You will receive a submission receipt upon successful transmission which will serve as the acknowledgement.

o    ACA TIP: There is NO PAPER filing Method available for NJ, all filings must be electronic. BenefitScape can take your paper forms, convert them and file electronically as required.

  • When must the Forms be filed? The Filing Deadline for the 2019 Tax Year is March 31, 2020. This deadline tracks the IRS deadline to file Forms 1094 and 1095 electronically with the IRS.
  • What’s required after the forms are filed?

o   If you are required to submit a correction file to the IRS, New Jersey will also require you to submit the correction file.


New Jersey reporting is one more year end task that payroll and benefits people do not need. On the face of it is simple but as with all these processes the devil is in the details.

What employee records do you send all on the XML file , or only those you believe to be in New Jersey etc. There will be errors, including those from the IRS, and how should they be handled?  Will the errors require a complete refile with New Jersey or should you file only the errors? Should the employee receive another corrected report? And this is just the beginning of issues that will arise with the first time effort.

Our solution

BenefitScape will take your federal IRS XML file (or paper Forms) and handle your New Jersey filing completely. No additional work, programming uploading or parsing records on your end. We do it all.

Our service includes selecting only those employees that should be reported, handling any areas that come back from the IRS and providing you with a website to add or delete employees that might have been missed in the initial analysis and now need reports to support your New Jersey tax filing. We provide you with an archive and all of the receipts substantiating your New Jersey filing.

If you only have paper forms, no problem, send the forms along will convert them into electronic data and e-file the results to New Jersey using the same procedure outlined above.

Bottom line don’t add to your workload this year simply provide us your data and we will handle the rest.

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