New Jersey Adopts Individual Health Insurance Mandate
New Jersey is following in the footsteps of Massachusetts and is requiring all residents to maintain minimal essential health insurance beginning January 1, 2019, unless the individual qualifies for an exemption. Failure to have health coverage or qualify for an exemption may result in the assessment of a Shared Responsibility Payment that is generally based on the employee’s income and family size and is capped at the statewide average premium for Bronze Health Plans in New Jersey. The maximum payment for an individual taxpayer is $3,012. The maximum payment for a family will range from $4,500 to $15,060 depending on income and family size.
What is the Employer Obligation?
Employers will be obligated to verify health coverage for their employees residing in New Jersey. Employers will file the same health coverage forms they file with the IRS through the New Jersey’s system for filing of W-2 forms. Coverage information must be filed electronically with the state and for 2019, coverage information is due by February 15, 2020. New Jersey will be posting instructions on their website. Out-of-State employers that withhold and remit New Jersey Gross Income Tax for New Jersey residents have the same filing requirements as business located in New Jersey.
Which Forms should the Employer Use?
The State is expecting to receive Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. If the employer files the 1094-B and 1095-B forms, they should use these forms for the New Jersey filing. If the federal government discontinues reporting, or substantially alters the forms, New Jersey will deploy similar forms and require that they be sent to the state and to New Jersey Taxpayers.
What should employers do now?
Employers don’t need to take any immediate action. As more information is released on the mandated reporting, employers should ensure they have the required information in place to complete the reporting by February 15, 2020.