What if a person is self-employed and has no insurance? How is that handled on the tax return and what are the consequences?
A self employed individual who can afford health insurance but has yet to get insurance will be penalized monthly.
The individual could appeal the penalty to the Health Connector if a hardship prevented him or her from purchasing insurance.
What are the employer obligations under the Massachusetts health care mandate?
Employer reporting responsibility information is available at the Commonwealth Health Insurance Connector Authority.
For state health reform law, the only reporting rule for employers to DOR relates to the Form MA 1099-HC.
Carriers will send a report to DOR listing all Form MA 1099-HCs they issued. If an employer is issuing the Form MA 1099-HC to employees, a report will need to be filed with DOR.
For information on this requirement, please see the Instructions for Electronic Filing Form MA 1099-HC
I am an employer with a self-insured health care plan and I need to provide Form MA 1099-HC to my employees. Where can I obtain draft copies of the Form MA 1099-HC?
The Form MA 1099-HC is available on the DOR website.
Form MA 1099-HC Questions
Are residents required to submit Forms MA 1099-HC when filing their income tax returns?
If you are filing a paper return, please attach a copy of your Form MA 1099-HC form to your tax return.
If you have not received a copy of your Form MA 1099-HC, please attempt to obtain one from your insurance carrier. If you are unable to obtain a copy of your Form MA 1099-HC, you may submit your return without the form attached.
Please be advised that this could delay the processing of your tax return. As always, electronic filing is the quickest and most efficient way to file your tax return with DOR.
Is there a standard format for the Form MA 1099-HC?
No. There is no standardized format.
The Form MA 1099-HC may vary depending upon each carrier.
The information fields must be consistent and must convey the information to the taxpayer that is needed on the taxpayer’s Schedule HC.
If an individual calls a carrier/employer to request a copy of a prior year’s Form MA 1099-HC, does a report need to be sent to DOR for the prior year's Form MA 1099-HC?
You can't commingle tax years, and DOR has designed the XML schema to prevent it. You do need to be able to send data for prior tax years, if such data was never sent for a particular tax year.
So, let's say in 2012 a former customer asks you to generate a Form MA 1099-HC for 2007. If the carrier had already sent it in 2007, send DOR nothing new - that data from 2007 will still be here in the DOR database.
If you didn't send anything to DOR electronically in 2007, it should come in its own transmission/file, with the tax year element set accordingly. Carriers may also use the 1099-HC Mapped Data Upload utility to send additions to prior years' data.
If a subscriber has a mailing address for the winter months (e.g., Florida) and a default address for the rest of the year (e.g., Massachusetts), which address should be sent to DOR and used on the Form MA 1099-HC?
It doesn't matter. Just make sure that what is sent to DOR and what is sent to the taxpayer is consistent.
If a dependent has a different mailing address, should the dependent receive a separate Form MA 1099-HC?
The only requirement is that the Form MA 1099-HC be sent to the primary subscriber.
Dependents are not required to receive Form MA 1099-HC.
Carriers may send separate Forms MA 1099-HC to dependents if they so choose.
If a dependent needs to file a Schedule HC, he or she can:
- Obtain the necessary information from the subscriber's Form MA 1099-HC, or
- Request a separate Form MA 1099-HC from the carrier.
If a parent company will be sending out Forms MA 1099-HC for its operating companies, what should appear in Line 1, the parent company name or the individual business entity's name?
It doesn’t matter.
The parent company can list either the:
- Parent company's name or
- Individual business entity's name
so long as what is reported to DOR electronically and what is sent to the taxpayer on Form MA 1099-HC is consistent and the FID numbers are the same.
How many attempts do carriers/employers have to make to deliver letters that are sent back as "undeliverable" via US mail?
This is an internal decision of the carrier. There is no tax information on the Form MA 1099-HC, therefore DOR has no position on mail returned from the post office.
Are carriers/employers required to mail Forms MA 1099-HC to Medicare subscribers?
No. DOR does not require carriers to send Form MA 1099-HC to their Medicare members. This applies to both Supplemental and Replacement plans.
What is the penalty for a health insurance carrier or employer that is obligated to issue Form MA 1099-HC but does not comply?
The 1099 HC is a tax document like any other tax document required to be submitted to the DOR by law and regulation. Failure to do so could subject the employer or carrier to a host of penalties, as provided under MGL. c. 62C § 8B.
Below is the language contained in DOR's regulation.
(9) Penalty for Failure to Provide Documentation of Health Insurance
(a) Pursuant to MGL c. 62C, § 8B, carriers, employers or other sponsors of employment-sponsored health plans that fail to provide written statements to covered individuals or to report to the Commissioner in violation of this section shall be punishable by a penalty of $50 per individual to which the failure relates, not to exceed $50,000 per year per violator.
(b) The Commissioner shall assess the penalties under MGL c. 62C, § 8B as a tax subject to chapter 62C.
File Transmission Questions
My insurance company is not filing the Form MA 1099-HC report on my behalf, how do I file the report with DOR?
DOR offers two methods for health insurance carriers or employers to send health care data to DOR; XML or through the 1099HC Mapped Data Upload (MDU).
XML Data. This method requires carriers or employers to transmit XML data to DOR via an SSH connection with DOR. Data must be in good XML format. These XML files are uploaded to DOR through a secure application called MassTaxConnect (MTC).
Information that relates to filing requirements and methodology is located on the Health Care FAQs for Insurance Carriers page.
Filers can also find registration and file upload information in the TY2009 Bulk E-Filer Registration and Transmission Guide, as well as important instructions relating to the XML file format and the XML schema information. Additionally, a sample Form MA 1099-HC and Schedule HC and Instructions may be found at this location.
General Health Care related information can be found on the DOR Health Care Reform page.
Mapped Data Upload. DOR has developed 1099-HC Mapped Data Upload (MDU), which allows 500 records or less of health care information to be transmitted to DOR through a cut and paste process. This application is located in MassTaxConnect (MTC). Registered users of MTC will see a new Health care reporting option displayed on the MTC home page. Through this link users will be led to 1099-HC Mapped Data Upload.
Can employers file Form MA 1099-HC information with DOR in paper format?
No. Employers must submit Form MA 1099-HC information to DOR electronically in properly formatted XML through the SSH connections or through the 1099-HC MDU for files less than 500 records.
Is there specific software that is required for filing electronically?
No. The electronic document is in XML format, which is a standard electronic document format used by many companies, including the IRS, for many initiatives. Various XML development tools are available to help in the development of the XML file if the insurance carrier/employer is developing the file in-house. Commercial vendors also exist in the market place that could assist if needed. DOR does not recommend any tool or vendor over another.
I run a small business and our out-of-state Carrier has informed me that it is not filing Healthcare information with DOR on our behalf. Do I need to submit data through the same process that is used by the large Carriers?
No. DOR has developed an easier method for businesses and carriers with less than 500 health care records to submit data to DOR. The method is called 1099-HC Mapped Data Upload and it allows companies to cut and paste data from spreadsheet software into a Web page and submit the data to DOR. As the name suggests, the data in each column is "mapped" in the process before it is sent to DOR.