One of the most complex and often-debated provisions of the Affordable Care Act is the individual mandate, which required most households in the U.S. to have health insurance or face a penalty. That provision was eliminated for many Americans in 2019, when the Tax Cut and Jobs Act reduced the penalty to $0.
Today, five states and the District of Columbia still require individuals to have health insurance or face penalties. The state mandates supersede federal law.
It’s important for individuals living in these states to understand what is required of them, and the costs they will face if they don’t comply with state law.
Businesses with employees who live in those states should also be aware of the financial burden that might be imposed on their team members, as well as ensure that they meet state reporting deadlines.
Important dates for employers
| State | Deadline for reporting to employees | Deadline for reporting to state |
| New Jersey | March 2, 2022 | March 31, 2022 |
| California | January 31, 2022* | March 31, 2022 |
| District of Columbia | March 2, 2022 | April 30, 2022 |
| Massachusetts | March 31, 2022 | December 15, 2021 |
| Rhode Island | 3/31/2022 | March 31, 2022 |
| Vermont | March 2, 2022 | N/A |
*Enforcement is delayed
New Jersey
Individuals living in the Garden State must maintain health coverage every month for themselves, their spouse, and any dependents (unless an exemption applies).
Individual penalty
The maximum penalty calculation is complicated. It is the lesser of two options: Either the state average premium for a bronze level plan (based on household size) or the greater of two calculations – an annual amount set by the state or a percentage of annual income. Essentially you need to compare three numbers. For 2021, here’s what that looks like.
| Per person penalty | $695/adult and $348 per child under 18
|
| Income percentage penalty | 2.5% of annual income above the filing threshold |
| Calculation | |
| 1. Take the greater of the per person penalty and the income percentage penalty. | |
| 2. Compare it with the average bronze level premium for your household size. | |
| 3. The lower number is your penalty. | |
Employer 1095 deadlines
| Deadlines | March 2, 2022 | March 31, 2022 |
| Form | 1095-B or 1095-C to covered employees
|
Copies of 1095-B with copies of 1095-Cs or substitute NJ-1095 filed with the NJ Division of Taxation
|
| Penalties | $50 state penalty for each form not provided on time to covered employees
|
$50 state penalty for each form not filed with the NJ Division of Taxation. The maximum penalty is $50,000.
|
| Details | Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible.
|
Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible for filing, but you can be liable for any reporting penalties.
|
California
Individuals living in the Garden State must maintain health coverage every month for themselves, their spouse, and any dependents (unless an exemption applies).
Individual penalty
| Per person penalty | $695/adult and $348 per child under 18
|
| Income percentage penalty | 2.5% of annual income above the filing threshold |
| Calculation | |
| 1. Take the greater of the per person penalty and the income percentage penalty. | |
| 2. Compare it with the average bronze level premium for your household size. | |
| 3. The lower number is your penalty. | |
Employer 1095 deadlines
| Deadlines | March 2, 2022 | March 31, 2022 |
| Form | 1095-B or 1095-C to covered employees
|
Copies of 1095-B with copies of 1095-Cs or substitute NJ-1095 filed with the NJ Division of Taxation
|
| Penalties | $50 state penalty for each form not provided on time to covered employees
|
$50 state penalty for each form not filed with the NJ Division of Taxation. The maximum penalty is $50,000.
|
| Details | Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible.
|
Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible for filing, but you can be liable for any reporting penalties.
|
*Enforcement is delayed
District of Columbia
Individuals living in our Nation’s Capital must maintain health coverage every month for themselves, their spouse or registered domestic partner, and any dependents (unless an exemption applies).
Individual penalty
The maximum penalty calculation is complicated. It is the lesser of two options: Either D.C.’s average premium for a bronze level plan (based on household size) or the greater of two calculations – an annual amount set by D.C. or a percentage of annual income. Essentially you need to compare three numbers. For 2021, here’s what that looks like.
| Per person penalty | $695/adult and $348 per child under 18 capped at $2,085/family
|
| Income percentage penalty | 2.5% of annual income above the filing threshold |
| Calculation | |
| 1. Take the greater of the per person penalty and the income percentage penalty. | |
| 2. Compare it with the average bronze level premium for your household size for qualified health plans through D.C. Health Link. | |
| 3. The lower number is your penalty. | |
Employer 1095 deadlines
| Deadlines | March 2, 2022 | March 30 or April 30, 2022 |
| Form | 1095-B or 1095-C to covered employees either by mail or electronically.
|
Copies of 1094-B/1095-B or 1094-C/1095-C filed electronically with the D.C. Office of Tax and Revenue (OTR) filed. There is no paper reporting option.
If you provided paper forms to your employees, reporting is due 3/30/22. If you provided forms electronically, reporting to OTR is due 4/30/2022.
|
| Penalties | N/A
|
N/A
|
| Details | Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible.
|
Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible for filing, but you must also file forms with the D.C. OTR.
|
Rhode Island
Individuals living in the Ocean State must maintain health coverage every month for themselves, their spouse, and any dependents (unless an exemption applies).
Individual penalty
The maximum penalty calculation is complicated. It is the lesser of two options: Either Rhode Island’s average premium for a bronze level plan (based on household size) or the greater of two calculations – an annual amount set by Rhode Island or a percentage of annual income. Essentially you need to compare three numbers. For 2021, here’s what that looks like.
| Per person penalty | $695/adult and $348 per child under 18
|
| Income percentage penalty | 2.5% of annual income above the filing threshold |
| Calculation | |
| 1. Take the greater of the per person penalty and the income percentage penalty. | |
| 2. Compare it with the average bronze level premium for your household size. | |
| 3. The lower number is your penalty. | |
Employer 1095 deadlines
| Deadlines | January 31, 2022 | March 31, 2022 |
| Form | 1095-B or 1095-C to covered employees either by mail or electronically.
|
Copies of 1095-B/1095-C filed with the Rhode Island Division of Taxation
|
| Penalties | Determined on a case-by-case basis
|
Determined on a case-by-case basis
|
| Details | Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible.
|
Self-insured employers are responsible for reporting.
If you have a fully-insured plan, the insurance carrier is responsible for filing, but you must also file forms with the D.C. OTR.
|
Massachusetts
Individuals living in the Bay State must maintain health coverage that meets the Massachusetts Creditable Coverage standard (MCC). Individuals, their spouse, and any dependents must be covered every month (unless an exemption applies).
Individual penalty
The penalties are income based, as a percentage of the federal poverty level (FPL). You can find the FPL for your family size here https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines. If your income is 150% of the FPL or lower, no penalty applies.
The annual penalties for 2021 are:
| Income category | Penalty
|
| 150.1 – 200% of Federal Poverty Level | $276/year |
| 200.1 – 250% of Federal Poverty Level | $528/year |
| 250.1 – 300% of Federal Poverty Level | $792/year |
| Greater than 300% of Federal Poverty Level | $1,704/year |
Employer 1095 deadlines
| Deadlines | January 31, 2022 | December 15, 2021 |
| Form | 1099-HC to covered employees
|
HIRD to the MA Department of Revenue. This is required for every employer with 6 or more employees.
|
| Penalties | $50 state penalty for each form not provided to covered employees, with a $50,000 maximum penalty.
|
$1,000 – $5,000 for failing to file or knowingly falsifying an HIRD.
|
| Details | Self-insured employers are responsible for reporting (or their TPA).
If you have a fully-insured plan, the insurance carrier is responsible.
|
Employers are responsible.
|
