States with Individual Health Insurance Mandates

After the repeal of the Affordable Care Act’s Individual Mandate, which was effective January 1, 2019, several states began the process of implementing statewide individual mandates. Currently there are six states that have passed some form of the individual mandate.

To date, California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont have passed state individual mandates. With each state passing its own individual mandate, it is more difficult for companies to keep up with all the different regulations and reporting requirements. Essentially, even if you have one employee filing taxes in one of these states, your company must comply with that state’s individual mandate. This means companies will not only have to be ACA compliant at the federal level, but also at the individual state levels.

Additional states are considering their own state healthcare mandate. These states include Hawaii, Washington, Connecticut, Minnesota, and Maryland.

Below is a reference chart of the current individual mandates in place.

State	Effective Date	Employer Obligations	Penalties	Process
California	January 1, 2020	Employers both in-state and out-of-state who employ CA residents must provide the same data outlined in Section 6055 and 6056. Employers are required to report annually by March 30th. Subject to a $50 per individual not reported.	Equal to 2.5% of salary or $695 per adult and $347.50 per child, or up to $2,085 per family, whichever is greater.	Self-insured health plans must report information about each individual enrolled in such coverage on form 1095-C, Part III. Employers with greater than 250 forms must file electronically. Further information can be found here.
District of Columbia	January 1, 2019	Employers are required to report annually within 30 days of the IRS tax deadline. Applies to applicable large employers both in-state and out-of-state who withhold and pay payroll tax to D.C. or who employ D.C. residents even if there is no withholding. ALE must send the same 1095-C that it sends to the IRS to D.C.	Equal to 2.5% of salary or $700 per taxpayer.	D.C. will require employers to file returns using the mtax.dc.gov portal offered by the Office of Tax and Revenue. Click here for the mytax.dc.gov portal.
Massachusetts	2006	During November 15 through December 15 each year, employers with six or more employees in MA for whom they filed a quarterly wage report must file a health insurance responsibility disclosure (HIRD) form via the MassTaxConnect web portal. This form assists MassHealth to identify members with access to qualified coverage for administering the MassHealth Premium Assistance Program. Employers are also responsible in issuing Form 1099-HC annually to participants.	Penalties vary depending upon income, age and family size.	If your insurance company doesn’t file Form 1099-HC on your behalf, you are required to either upload the XML files through MassConnect. Diversified Group will send out 1099-HC forms directly to impacted members by the end of January each year on behalf of our clients. More information can be found here. For information on the HIRD form, click here.
New Jersey	January 1, 2019	Employers must report annually by March 31st. Applicable Large Employers both in-state and out-of-state who employ NJ residents must file form 1095-C with the state.	Equal to 2.5% of salary or $695 per taxpayer.	New Jersey will leverage the same secure transport system that is used by employers or their vendor to submit W-2 forms. Called “MFT SecureTransport” or “AxWay,” vendors or ALEs must sign up with an account in order to be authorized to submit forms. More information can be found here.
Rhode Island	January 1, 2020	The state has not disclosed whether the furnishing of health statements will be on the standard 1095-C or through a similar document. No guidance released yet.	Equal to 2.5% of salary or $695 per taxpayer and $347 per child.	No guidance released yet. More information can be found here.
Vermont	January 1, 2020	Currently in Vermont, there are no additional ACA reporting requirements for employers. Employers will have new coverage reporting obligations to the state only if the federal ACA reporting requirements are eliminated.	Vermont’s individual mandate does not have a penalty for non-compliance in 2020, and data generated under the mandate will instead be used by the state in order to target their outreach towards people who are uninsured.