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Complying With Various State Individual Health Care Mandates

One of the pillars of the Affordable Care Act (ACA) is the Shared Responsibility for Individuals.

This provision requires individuals to carry minimum essential health care coverage or pay a shared responsibility penalty. This minimum essential coverage (MEC) requirement is met by enrolling in one of the following coverage types or meeting the criteria for an exemption:

  • an individual health plan available in the private market or on the Exchange;
  • employer-sponsored health plan;
  • government-sponsored programs, e.g. Medicare, Medicaid, CHIP, Tricare, other veterans coverage; health plan for Peace Corps volunteers; or
  • grandfathered health plan

Exemptions from this requirement are available to:

  • Religious conscience objectors;
  • Members of a health care sharing ministry;
  • Individuals who are not citizens, nationals, or aliens lawfully present in the U.S.;
  • Incarcerated individuals;
  • Individuals for whom the required contribution exceeds the maximum contribution, i.e., 8% of household income indexed annually;
  • Member of certain Indian tribes;
  • Individuals whose income does not exceed the threshold for filing a federal income tax return;
  • Individuals who had a gap in coverage for less than three continuous months; or
  • Those who were extended a hardship exemption

The passage of the Patient Protection and Jobs Act of 2017 effectively removes the Affordable Care Act’s (ACA) penalty for failure to have individual health care coverage by altering the amount of the penalty to $0. Without this “incentive” to purchase health care coverage, many states believe further deterioration of the individual marketplace will follow since healthy individuals will forgo the purchase of health insurance. With no mix of healthy people in the risk pool, costs will escalate. Additionally, there is fear that individuals without coverage will not be able to pay the high costs of health care and will not seek the treatment they need or seek treatment early enough to mitigate serious health problems. In response, a number of states have instituted their own individual health plan mandates. In this way, they feel that they will still be able to meet the demands of health care and the financing of health care.

With these new mandates, employers now have additional reporting responsibilities that will help the states understand who has MEC and who does not. Employers should consult with their insurance carrier, third party administrator (TPA), ACA reporting vendor, or payroll vendor to ensure compliance with reporting requirements.

The following chart show, for each state mandating health coverage the requirements and responsibilities for individuals and employers along with the penalties for non-compliance:


Requirements/ Exceptions




CA All CA residents shall be enrolled in and maintain MEC for each month (exempt if cost >8.3% of household income)

Subsidies available to residents earning less than 600% of federal poverty line (FPL)

Mirror ACA individual mandate penalties

Employer penalty = $50 per individual per tax year for failure to report

Individual penalty = 2.5% of household or $750 per adult/$375 per child, whichever is greater

Annual employer filing by March 31 (for 2023 tax year – 3/29/24)

Carrier filing is sufficient for fully insured plans. Self-funded plans must file their 1095s with the state. Instructions can be found here.



Requirements/ Exceptions




DC DC residents 21 and older with income more than 222% of FPL Individual penalty = 2.5% of salary or $695 per taxpayer Fully insured plans: Employers with 50 or more full-time employees and at least one DC resident employee who offer a health plan must file annual report within 30 days of IRS tax deadline

Must file electronically through

Federal forms 1094-C and 1095-C acceptable – working on electronic filing

MA Residents of the commonwealth over 150% of FPL must have minimum creditable coverage (MCC) Up to $182/month or $2,196/year per individual (2023) Employers with 6 or more employees must file HIRD (Health Insurance Responsibility Disclosure form (1099-HC). The HIRD form is due each year on December 15.

Individuals report on their tax forms. The deadline to distribute copies of MA 1099-HC to employees is January 31, 2024. The deadline to submit to the state is March 31, 2024.

NJ All taxpayers and any dependents (if applicable individuals) must have MEC for each month Individual penalty = per person maximum charge of $3,661 Employers with any NJ residents must report - annual employer filing by March 31

Individuals report on tax returns

Employers may file using federal forms 1094/1095-B or 1094/1095-C – should only send forms for NJ residents)

RI All federal taxpayers must carry MEC for self, spouse, and dependents each month (mirrors ACA MEC definition) Individual penalty = 2.5% of salary or $695 per taxpayer Employers with any RI resident employees furnish reports to employees by Jan 31 and must file with the Division of Tax by March 31 - may use 1095-B and 1095-C 1/1/2020


Requirements/ Exceptions




VT All applicable individuals must maintain MEC at all times (mirrors ACA MEC definition) There is currently no cash penalty for not having insurance No formal guidance has been issued on employer reporting

Individual reporting on tax returns


For more information on ACA reporting, review the ACA Reporting Cheat Sheet. Did you finalize all reporting, but realized there are errors? Read the Guide to Correcting ACA Reporting Mistakes.


CA — Senate bill 78, Chapter 38

DC — Individual Taxpayer Health Responsibilities FAQ

MA — MA Health Insurance Responsibilities

NJ — NJ Health Insurance Mandate

RI — RI Health Care Coverage Requirements

VT — VT Individual Mandate and