Beginning January 1, 2019, New Jersey (NJ) requires its residents to maintain health insurance (minimum essential health coverage) throughout 2019 and beyond, unless an exemption applies. See our recent update for more on this mandate. Failure to have health coverage or qualify for an exemption will result in an Individual Shared Responsibility Payment to be paid with the individual’s 2019 NJ Income Tax Return. Penalties imposed by the New Jersey Health Insurance Market Preservation Act (mandate) will be used to stabilize and subsidize a NJ state insurance program. The NJHIMPA effectively adopts the individual mandate rules under the Affordable Care Act (ACA), including the tax penalties that were in effect for individuals before the federal individual mandate penalties were reduced to zero effective as of January 1, 2019. The NJHIMPA does not include an employer mandate, so the law does not currently require employers to provide health coverage options to their employees. The NJHIMPA does include an employer reporting requirement.
Employer Reporting Requirement
The NJHIMPA includes an employer reporting requirement that closely tracks federal ACA reporting requirements. To help employers comply, NJ has now launched an official website which addresses the reporting requirement as well as the application of the rules to out-of-state employers of NJ residents, employers with fewer than 50 employees, insured vs. self-insured employers, and adult children. Under the law, reporting entities are required to send a return to the NJ State Treasurer as well as to the individual. To meet this requirement, employers who already use Form 1094-C and Form 1095-C to report health coverage information federally, will be required to remit copies of these ACA reporting forms to the NJ Division of Taxation on or before February 15th following the close of each calendar year (so the first due date under the NJHIMPA is February 15, 2020). In the event the federal government discontinues the use of these ACA forms, NJ will deploy similar NJ forms.
Out-of-State Employers of NJ Residents: Out-of-state employers that withhold and remit NJ Gross Income Tax for NJ residents have the same filing requirements as businesses located in NJ.
Employers With Fewer Than 50 Employees: Under the federal ACA reporting requirements, employers with fewer than 50 employees are not required to submit the ACA reporting forms to the IRS. NJ also does not require these employers to submit the ACA reporting forms but encourages them to do so.
Adult Children: Under the federal ACA, adult children up to the age of 26 may be covered by their parents’ health plan. NJHIMPA does not require that ACA reporting forms be provided separately to children who are covered by their parents’ health plans. It is recommended employers advise employees to provide a copy of any ACA reporting form containing coverage information to their children residing in NJ.
We will continue to provide updates on the NJ reporting rules as further information becomes available. Contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 should you have any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.