UPDATED August 8, 2019 with new changes to the employer reporting requirements.
The New Jersey Health Insurance Market Preservation Act (“NJ Individual Mandate”) requires New Jersey residents to maintain health coverage or face a penalty. Starting with Tax Year 2019, the NJ Individual Mandate requires third parties to verify individuals’ health coverage through New Jersey’s system for filing W-2 forms.
Beginning January 1, 2019, New Jersey (“State”) requires residents to have minimum essential health coverage unless they qualify for an exemption. If an individual does not maintain coverage, they will be liable for a Shared Responsibility Payment. The NJ Individual Mandate serves as a state replacement for the now-repealed federal individual mandate under the Affordable Care Act (“ACA”).
In order to verify whether an individual maintains minimum essential coverage, the State requires applicable entities to report health care coverage. Applicable entities include carriers and employers or sponsors of employment-based health plans. Applicable entities must remit a copy of their ACA reporting forms to the State and individuals.
What forms do employers need to submit to the State?
New Jersey employers must provide the State with the same ACA Reporting forms as they provide to the IRS. Out-of-State employers who employ New Jersey residents have the same filing requirements as in-state employers and are not limited to employers that withhold New Jersey payroll taxes.
The forms that must be submitted depend on whether an employer is an Applicable Large Employer (those with 50+ full time and equivalent employees in the prior calendar year) and whether they are fully or self-insured. For the required forms, see the grid below:
|Fully Insured Medical Plan||Self-Insured Medical Plan|
|Non-Applicable Large Employers (small employers)||Employer not required to file with the IRS.
Health coverage provider files 1094-B.
|Employer files a 1095-B for each covered employee.|
|Applicable Large Employers||Employer files 1095-C (Parts I and II) for each person who is a full-time employee for at least one month of the calendar year.
Health coverage provider files 1095-B for each covered member of the plan.
|Employer files 1095-C for each employee who is a full time for at least one month of the calendar year. Employer fills out Parts I and II of 1095-C for part time employees.
|Multiemployer Plan||Plan sponsor (Board of Trustees) files 1095-B for enrolled individuals.
Employer files Parts I and II of the 1095-C for each employee.
|Plan sponsor (Board of Trustees) files 1095-B for each covered employee.
Employer files Parts I and II of the 1095-C for each covered employee.
If in the future, the federal government no longer requires ACA reporting, the State will devise similar forms for employers to submit to comply with the NJ Individual Mandate.
When must employers submit their reporting?
Employers must provide 2019 coverage information electronically by March 31, 2020.
How do employers complete their NJ Individual Mandate reporting?
Employers will file health coverage forms through the State’s system for filing W-2 forms. The State plans on posting instructions on their website in mid-2019.
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.