New Reporting Requirements for Companies with Employees in New Jersey and the District of Columbia
February 17, 2020
Over the past year, the State of New Jersey and the District of Columbia both enacted individual mandates to maintain health insurance coverage for their residents. The new requirements don’t just impact people who live in those areas; they affect many companies that employ residents of the District of Columbia and New Jersey. Businesses that meet the following criteria are subject to new reporting requirements:
- Your company employs at least one person who is eligible for group health insurance coverage that lives in either New Jersey or the District of Columbia; and
- Your company has federal employer reporting responsibilities and is required to file Forms 1094 and 1095 B or C with the IRS. These requirements generally apply to applicable large employers (i.e. companies who averaged 50 or more full-time employees including full-time equivalents during calendar year 2018 or small employers sponsoring a self-insured or level-funded health plan).
Both New Jersey and the District of Columbia will require all ALEs and small employers with self-funded health plans to file information reports annually to help enforce their jurisdiction-specific individual mandates. These requirements are separate from federal employer reporting obligations. If your company uses an outside vendor to assist with federal employer reporting obligations, then Kistler Tiffany Benefits encourages you to discuss the specific requirements with your vendor as soon as possible.
We’ve also broken down in detail what you need to know about the new requirements for each jurisdiction.
New Jersey Requirements
The State of New Jersey has guidance available for employers to explain the state’s new individual mandate and related employer reporting obligations.
- All ALEs and self-funded employers that provide coverage to New Jersey resident employees must report regardless of where the company is located.
- The New Jersey reporting deadline is March 31, 2020. The deadline originally was February 15, 2020, but the state extended it to mirror the Internal revenue Service (IRS) deadline for electronically submitted federal ACA coverage returns.
- Unlike the IRS, the only way New Jersey will accept coverage returns from employers and health coverage issuers is electronically. There is no paper reporting option available.
- Employers with New Jersey reporting obligations must use IRS Forms 1094 and 1095 B or C to provide the information to the state.
- Insurers and employers must submit their data using the Division of Revenue and Enterprise Services’ (DORES) MFT SecureTransport service. It is the same system the state uses for Form W-2 transmissions. Employers that already use this system to submit Form W-2 data to the state will use the same login credentials. Businesses who use employer reporting vendors to assist them should verify if the vendor will be able to file returns in New Jersey for them, or if the company needs to transmit forms independently.
- Employers who do not have an MFT SecureTransport service account or need technical support should send an e-mail to e-GovServices@treas.nj.gov. Employers should reference health care mandate filings in the subject line.
- New Jersey is encouraging applicable employers and reporting vendors to participate in their transmission testing period. Testing is going on now and will run through October 31, 2019. To join in, you must send an e-mail to e-GovServices@treas.nj.gov that says, “Please tell me how to join New Jersey’s Health Mandate filing testing program.” Businesses who use an employer reporting vendor to assist them should verify with their vendor if the vendor will be testing the transmission process for them, or if the company will need to check independently.
- New Jersey regulators are encouraging employers and issuers only to send them IRS 1094 and 1095 forms for New Jersey residents. However, for convenience purposes, the state will accept all Form 1094 and 1095 data a business sends to the IRS. That means they will take an employer’s transmission even if it includes information about non-residents.
- If the federal government ever discontinues or substantially alters its reporting forms, then New Jersey will develop its own set of forms.
- Out-of-state employers who employ New Jersey residents have the same filing requirements as in-state businesses. These requirements are not limited to companies that withhold New Jersey payroll taxes.
- Insurers, government agencies, multi-employer plans, and all others that provide minimum essential coverage to New Jersey residents have to comply too.
- New Jersey law does not require employers to report on adult children up to age 26 who are both New Jersey residents and covered on a parent’s employer-sponsored plan. However, the state says it recommends that employers advise employees to provide copies of Form 1095-B or 1095-C to their children residing in New Jersey. That way, adult children can document their coverage to the state when they file their state tax returns.
District of Columbia Requirements
The District of Columbia published Notice 2019-04 to outline its requirements for businesses and health insurance carriers. Applicable entities must provide information to the DC Office of Tax and Revenue (OTR) to help enforce its individual mandate.
- All employers or other sponsors of employment-based health plans, including governmental agencies, have to report if they covered at least fifty full-time employees in 2019 and at least one employee who was a District resident. Health insurers and self-funded plans that provided minimum essential coverage to a District resident during 2019 have to report too.
- Large employers or other sponsors of employment-based health plans have to report on any employee for whom they paid District-based employment taxes in 2019. Self-funded plans have to report on all covered individuals who had a home or mailing address in the District at any time during the applicable calendar year. These requirements apply both if the entity is a District-based corporation and or located elsewhere.
- The deadline for filing with the District is different than for IRS filings. For the tax year ending December 31, 2019, the deadline will be June 30, 2020. For all later years, the deadline will be 30 days after the IRS deadline for submitting 1095-B or 1095-C forms, including any extensions granted by the IRS.
- Unlike the IRS, the only way the District will accept coverage returns from employers and health coverage issuers is electronically. Forms must be submitted through MyTax.DC.gov using OTR’s prescribed layouts and file formats. There is no paper reporting option available.
- Employers with District reporting obligations must use IRS Forms 1094 and 1095 B or C to provide the information to OTR.
- Third-party service providers may file information returns on behalf of applicable entities. Businesses who use employer reporting vendors to assist them should verify if the vendor will file returns in the District for them, or if the company needs to transmit forms independently.
- Applicable entities and employer reporting vendors that already have a MyTax.DC.gov login do not need an additional login or need to do anything else to sign-up.
- Applicable entities and reporting vendors without a MyTax.DC.gov login must sign up at the MyTax.DC.gov portal before filing. Employers and reporting vendors can sign up now.
- Bulk filers can test the submission process ahead of time by sending an e-mail to firstname.lastname@example.org with the attached file.
- During the official submission process, incorrect files will not upload and the filer will get an error notice. When a file uploads successfully, the user will immediately see an accepted screen, rather than a file processing notification. The District’s system will not send a separate verification notice.
- Filers that make a mistake will have until December 31 of that year to file corrections.
- Employers with questions about how to register with OTR or how to file returns should contact OTR’s Customer Service Center at email@example.com or (202) 759-1946.
- Employers with questions about whether you are required to file returns, please contact the Office of General Counsel at (202) 442-6500.