New Jersey Individual Mandate: Update on Reporting Requirements
New Jersey Issues New Guidance on 1094-C and 1095-C Reporting
The New Jersey Individual Mandate law went into effect on January 1, 2019. Not only does it require residents to have healthcare, but it also includes a provision requiring employers to file returns electronically for any New Jersey taxpayers. All employers who withhold and submit tax to New Jersey on behalf of their employees will be required to comply.
On July 19th, the State of New Jersey pushed back their deadline for receiving 2019 forms to March 30, 2020, which matches the due date for the IRS. They also opened their testing window for receiving files, which runs through September 1, 2019.
IRS XML format will be accepted
The State plans to leverage the same XML format used by the IRS for receiving 1094-C and 1095-C information, which will lessen the burden of meeting a new specification. However, the IRS receives data for residents in all states within a single file, which would transmit non-New Jersey resident information to the State and require the State to comb through the records and identify residents themselves.
Privacy concerns for non-New Jersey residents
The allowance of filings that include non-New Jersey residents raises significant privacy and legal concerns for employers who employ across the country. The State of New Jersey’s website cautions, “Out-of-state filers who provide information on non-residents of New Jersey should consult privacy and other laws pertaining to residents of other States before sending any sensitive or personal data to New Jersey.”
The 1095-C form includes the following protected information and HIPAA data:
- Social Security number
- Taxpayer name and dependent names
- Date of birth
- Health insurance enrollment dates
Employers who use this short-cut option could face sharp scrutiny from employees who do not reside in New Jersey. There may also be privacy concerns if their HIPPA protected data is provided to New Jersey without their consent.
Rhode Island enacts an individual mandate
On July 5, 2019, Rhode Island became the sixth state to pass an individual mandate. See our comprehensive post on state individual mandates.
Categorized in: ACA