Streamline 1095-B Filing Across Multiple States Without Losing Accuracy

More than 33 million, individuals in the U.S. have some form of health insurance, with more people using private health insurance (65.4 %) than public coverage (36.3%). For health insurance providers, this widespread coverage comes with a heavy administrative burden, particularly during the IRS Form 1095-B filing season.

While the IRS mandates annual ACA reporting under Section 6055, several states, such as California, New Jersey, Rhode Island, Massachusetts, and the District of Columbia, have their reporting mandates.

Health insurance providers, especially those operating across state lines, must e-file 1095-B forms as mandated by the IRS and the different jurisdiction requirements. Or else, risk costly penalties, compliance risks, and administrative strain.

 

The Complexity of Multi-State 1095-B eFiling

Under IRS Section 6055 of the Affordable Care Act (ACA), any entity that provides Minimum Essential Coverage (MEC) is required to report that information by filing IRS Form 1095-B (which details who was covered and when) with the IRS.

This reporting helps the IRS determine if an individual has qualifying health insurance coverage or faces a potential tax penalty (though the federal penalty is now $0, some states still enforce their own).

 

Different States. Different Reporting Requirements

Not all the U.S. states follow the same IRS or federal-level ACA reporting requirements. At the federal level, Form 1095-B reports Minimum Essential Coverage (MEC) to the IRS. However, in states with their own ACA mandates, insurance providers must file directly with the state agencies. Each of these states has its own rules, systems, and sometimes even different forms, which employers must follow in addition to the federal requirements.

California

The state of California requires employers and health insurance providers, whether located in California or not, to provide Minimum Essential Coverage (MEC) to California residents and report that coverage to the California Franchise Tax Board (FTB) and the IRS on Form 1095-B.

Deadline:

• January 31, 2025: Distribute Recipient Copies  
• March 31, 2025: File Form 1095-B with the California Franchise Tax Board (FTB)

New Jersey  

The New Jersey Health Insurance Market Preservation Act, which went into effect on January 1, 2019, requires every New Jersey resident to obtain “Minimum Essential Coverage” or make a Shared Responsibility Payment (SRP) on their N.J. tax returns. Employers who hire New Jersey citizens must file ACA forms. If they fail, the employee must file the ACA form to avoid penalties.

Deadline:

• March 03, 2025: Distribute recipient copies
• March 31, 2025: File 1095-B with the Division of Revenue and Enterprise Services’ (DORES) MFT Secure Transport service

Rhode Island  

Rhode Island also mandates ACA reporting for residents covered under MEC. In-state and out-of-state employers must submit 1095-B forms via the Rhode Island Division of Taxation and distribute copies to the individuals.

Deadline:

• March 03, 2025: Distribute recipient copies
• March 31, 2025: File 1095-B with the State of R.I. using the R.I Division of Taxation page

District of Columbia (D.C.)  

The District of Columbia (D.C.) requires ACA reporting from any employer that provides MEC to at least one D.C. resident. Form 1095-B must be filed annually with the Office of Tax and Revenue (OTR) through the MyTaxDC system. As with other states, employers must also furnish coverage statements to employees.

Deadline:

• March 03, 2025: Distribute recipient copies
• April 30, 2025: eFile 1095-B with the D.C. Office of Tax and Revenue (OTR) through MyTax.DC.gov.

Massachusetts

Unlike other states, Massachusetts requires employers to file the State-specific Form MA 1099-HC for health coverage reporting. Employers who provide MCC to MA residents must file Form MA 1099-HC with the state and distribute copies to employees.  

Deadline:

• January 31, 2025: Distribute recipient copies
• January 31, 2025: File Form 1099-HC with the Department of Revenue (DOR) through MassTaxConnect

 

New ACA Distribution Rules   

The current ACA reporting rules have shifted how health insurance providers handle Form 1095-B distributions. It is no longer a requirement. Previously, providers were required to furnish copies of IRS Form 1095-B to all covered individuals automatically. However, starting with the 2024 tax year, the requirement to distribute these forms is now voluntary, so long as certain conditions are met.

Under the Paperwork Reduction Act (PBRA) update, insurers and employers can meet the ACA’s furnishing requirement if they:

• Provide a clear, conspicuous, and accessible notice informing individuals that they can request a copy of their 1095 form, and  
• Fulfill any such request within 30 days or by January 31 of the following reporting year, whichever is later.

While the federal rule change reducing the automatic distribution of Forms 1095-B may help ease administrative tasks, it also creates new operational challenges for health insurance providers. Despite the relaxed federal requirement, many states still mandate that these forms be delivered to residents for state tax filing and ACA exemption purposes.

 

Error-Prone Manual Processes

When insurers manually handle 1095-B reporting across multiple jurisdictions, the risk of data entry errors, duplicate submissions, or incomplete records multiplies. States with their own reporting requirements plus the federal requirements mean that even something as minor as a missing character, extra space, or invalid file format can cause entire batches of forms to be rejected, resulting in penalties.

Without a centralized automation tool, insurers risk losing control over the accuracy and timeliness of their 1095-B reporting.

 

Best Practices to Streamline 1095-B Filing Across Multiple States  

Here are a few key best practices to streamline the multi-state 1095-B filing process without compromising accuracy.

1. Centralized Data Collection and Management  

To reduce inconsistencies and duplication, consolidate all data into a single, centralized reporting system. A unified data hub helps reduce manual entry errors and enables real-time visibility into compliance status across different jurisdictions. This centralization reduces the administrative burden and makes it easier to apply uniform validation protocols and have more control during peak filing season.

2. Maintain Up-to-Date State-Specific Rules  

Stay informed about state filing deadlines, electronic filing mandates, and unique reporting requirements. Some states may have additional or earlier deadlines beyond the federal IRS deadlines or specific submission processes and portals. All these rules and requirements must be continuously tracked and updated in real time to ensure they are aligned with the latest requirements.

3. Implement Robust Quality Controls

1095-B forms with inaccurate or incomplete data can lead to rejections, delays, or penalties. Establish automated validation checks or tools and review to catch errors early, such as TIN mismatches, duplicate records, etc. Using IRS TIN matching and ACA validation tools before submission can reduce the chance of rejected files or costly corrections after the deadline.

4. Provide Clear Statements to Covered Individuals  

While furnishing Form 1095-B to individuals is no longer federally required under certain conditions, many states still mandate it. They may need it to complete their tax returns or claim ACA-related exemptions. These statements must be provided with proper consent from the individual. Clear communication reduces the number of inquiries during tax season and helps maintain trust with policyholders.

 

File 1095-B Online with Tax1099

Tax1099 makes it easy to file 1095-B forms online. The platform supports multi-state filings with automated data checks, scheduled eFiling, AI assistance, integration with accounting platforms, and more.

We automate IRS Form 1095-B filing and submission in just three easy steps:

1: Create Your Tax1099 Account: Sign up or log in to Tax1099 and select IRS Form 1095-B. 

2: Enter Information: Enter all the necessary details, including employee and coverage details. 

3: Submit Form to IRS: Review the information for accuracy and submit the forms electronically to the IRS.

 

Create your Tax1099 account for free and get started with 1095-B filings.

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