The State of New Jersey has issued guidance regarding employer reporting requirements in light of the State's adoption of the Health Insurance Mandate effective for calendar year 2019.

New Jersey is the first state to indicate it will leverage the Federal Forms 1094-C and 1095-C to administer the states' individual mandate. The guidance goes on to say that, if the federal government stops using of these forms, then the state will develop its own, similar forms.

The returns must be filed by NJ businesses and by out-of-state employers that must withhold and remit NJ income tax for their NJ-resident employees. The guidance also indicates that the forms are due to be remitted on or before February 15 of the year following the close of each calendar year. This causes some concerns, as it is earlier than the federal filing date and earlier than the extended due dates that the IRS has granted for each year since the beginning of ACA reporting in 2016 (for calendar year 2015) for furnishing the Forms 1095-C to employees. Finally, while small employers (defined as less than 50 full-time employees) are not required to file the federal returns, small employers are encouraged to file the forms for NJ.

Based on the limited information on the website, several open questions remain. First, the website requires the forms to be remitted to the state by February 15 but does not indicate how that remittance will occur. Will there be an electronic filing option? Second, the website says that out-of-state employers that remit NJ income taxes have the same requirements as NJ employers for remitting their Forms 1094-C and 1095-C, but there is no indication that the remittance will be limited to those forms covering NJ residents. Moreover, a multistate employer will be completing the 1094-C, indicating counts of all the Forms 1095-C provided and all its full-time and total employees for each month, not just those resident in NJ. Is NJ expecting employers to remit all of their forms? Or will it only require remittance for NJ residents? If so, what sort of adjustments will be necessary to Form 1094-C?

EY will continue to monitor the NJ website for additional guidance on these open questions. We anticipate being able to support employers with NJ state filing obligations related to the individual coverage mandate.

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