The State of New Jersey recently issued new guidance for employers to explain the state’s new individual mandate and related employer reporting obligations. All applicable large employers (ALEs) and self-funded employers that provide coverage to New Jersey resident employees must report.
Starting with Tax Year 2019, the New Jersey Health Insurance Market Preservation Act (Market Preservation Act) requires third-party reporting to verify health coverage information supplied by individual payers of New Jersey’s Income Tax.
Coverage providers, must:
- By March 31, 2020, provide the New Jersey Division of Taxation with a 1095 health coverage form for each primary enrollee who was a New Jersey resident and to whom the filer provided minimum essential coverage in 2019. This applies to both part-year and full-year New Jersey residents. For 1095 filing purposes, a part-year resident is a primary enrollee who lived in New Jersey for at least 15 days in any month.
- Ensure that New Jersey receives the appropriate 1095-B or 1095-C form. Use the 1095 forms that the IRS has posted for the 2019 Tax Year. (See 1095-B or 1095-C.) Instructions on which form to use are below.
- Ensure that each primary enrollee who was a New Jersey resident or part-year New Jersey resident in 2019 receives at least one 1095 form that includes health coverage information. Sending a single 1095 to each primary enrollee is sufficient for both State and federal purposes. You do not have to send separate 1095 forms to spouses, dependents, or adult children of primary enrollees.
Key points about the New Jersey employer reporting obligations:
- The New Jersey reporting deadline has changed from February 15, 2020, to March 31, 2020. The state extended the deadline to mirror the IRS deadline for electronically submitted 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 Internal Revenue Service 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.
- Employers who do not have an MFT SecureTransport service account or need technical support should send an e-mail 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.”
- 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 nonresidents.
- 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 must comply too.
For more information, see https://nj.gov/treasury/njhealthinsurancemandate/employers.shtml