New Year, New Deadlines – Upcoming California and Other State Individual Mandate Reporting Deadlines
Beginning in 2021, employers sponsoring a group health plan with employees who are residents of California enrolled in the plan will be subject to the new California individual mandate reporting requirements. These employers must be aware of the deadline to furnish Forms 1095-C to employees by February 1, 2021 (as a result of the original January 31, 2021 deadline falling on a Sunday). The same IRS Form 1095-C provided to individuals under the Affordable Care Act will satisfy California’s requirement. While the IRS extended the federal deadline to March 2, 2021 under Notice 2020-76 (see our previous client alert here), California has not extended its deadline.
In addition, employers must be aware of the March 31, 2021 deadline to submit Forms 1094-C and 1095-C to the California Franchise Tax Board. Employers sponsoring a group health plan with employees who are residents of California enrolled in the plan must submit Forms 1094-C and 1095-C, Parts I and II to the state, but neither the IRS nor the state requires employers of fully insured plans to complete Form 1095-C, Part III. The insurer of the fully insured plan will provide the information in Part III of the Form 1095-C to the state using IRS Form 1095-B. In addition, the most recent version of the state’s draft instructions state that employers sponsoring self-funded health plans do not need to submit Form 1095-C for employees who were not offered coverage or waived coverage.
The most recent version of the state’s draft instructions provide that no penalty will be imposed on employers who file correct Forms 1094-C and 1095-C with the state by May 31, 2021. This provides employers with an extension of time to avoid the $50 penalty per individual not reported to the state using Forms 1094-C and 1095-C by the original March 31, 2021 deadline.
Other Upcoming State Individual Mandate Reporting Deadlines
The following states also have upcoming individual mandate reporting deadlines:
Massachusetts. Employers are responsible for issuing Form MA 1099-HC annually to employees enrolled in their health plan no later than January 31 of the following year. For tax year 2020, the deadline is February 1, 2021.
New Jersey. By March 2, 2021, employers must distribute a Form 1095-C for each primary enrollee who was a New Jersey resident and to whom the employer provided minimum essential coverage in all or part of 2020. Employers who employ New Jersey residents must submit Forms 1094-C and 1095-C to the New Jersey Division of Taxation by March 31, 2021.
Rhode Island. Employers that provide health coverage to any resident of Rhode Island must distribute a Form 1095-C to each Rhode Island plan participant and submit Form 1095-C to the Rhode Island Division of Taxation by January 31 of the following year. However, for tax year 2020 only, the Rhode Island Division of Taxation will extend the state reporting deadline to individuals to March 2, 2021 and to the Division of Taxation to March 31, 2021.
Washington, D.C. Employers that provide minimum essential coverage to D.C. residents must furnish a Form 1095-C to D.C. plan participants by January 31 of the following year unless the Office of Tax and Revenue (“OTR”) issues an extension, and submit IRS Forms 1094-C and 1095-C to the OTR within 30 days after the IRS deadline for submitting Form 1094-C and 1095-C, including any extensions granted by the IRS. For tax year 2020, the deadline to furnish Form 1095-C to D.C. plan participants is March 2, 2021, and the deadline to submit Form 1094-C and 1095-C to OTR is April 30, 2021.
If you have any questions, please contact the authors or one of the Miller Johnson attorneys listed to the left.