As a health insurance carrier (including MassHealth, Commonwealth Care, or Commonwealth Care Bridge), you are legally required to issue Forms MA 1099-HC to your subscribers no later than January 31 of the following year.
There is no standardized format for the Form MA 1099-HC. It may vary depending on carrier. However, the information fields must be consistent and must convey the information that the taxpayer needs to transcribe over to the Schedule HC.
If someone calls you, a carrier, to request a copy of their Form MA 1099-HC from a previous year, you need to send us data if you didn't send the information in the original tax year. However, if the 1099-HC is a reprint, then you don't need to electronically submit the report again unless the data changed.
Filing the 1099-HC
The FID number used for the 1099-HC is not necessarily the same as the FID number used for the IRS or other DOR filings. It's important that taxpayers report the FID number as shown in Box 2 of the Form MA 1099-HC on their tax return. The number that is reported on the Form MA 1099-HC, which you send to the subscriber, is not necessarily the same number that you may use for other tax reporting requirements.
When determining whether a subscriber has minimal creditable coverage (MCC) for a month or not,
- Month with coverage - Subscriber was covered for 15 days or more in the month
- Month without coverage - Subscriber was covered for 14 days or less in the month
The months where the member was enrolled in non-MCC compliant coverage should be left blank. The only time you fill in a month on the 1099-HC is when the subscriber was enrolled in MCC-compliant coverage for 15 days or more in the month. If the subscriber had non-MCC compliant coverage for the entire year, fill in the "No" field in the full-year minimum creditable coverage section of the 1099-HC.
Company names and mailing addresses
If a parent company will be sending out Forms MA 1099-HC for its operating companies, it doesn't matter whether the parent company's name or the individual business entity's name appears on Line 1. However, it's important that both the name and the FID number are exactly the same on what you report to us electronically and what you send to the taxpayer on their Form MA 1099-HC. Carriers are encouraged to use the name that would be least confusing for the taxpayer, taking what is listed on their enrollment card into consideration.
If a subscriber has more than 1 mailing address or a mailing address that is different from their default address, it doesn't matter which address you send to us or put on the Form MA 1099-HC. Just make sure what you send to us and what you send to the taxpayer is consistent.
Additional Resources for Filing the 1099-HC
Delivering the 1099-HC
As a health insurance carrier, your only formal requirement is to send Form MA 1099-HC to the primary subscriber. Send 1099-HCs to members with non-MCC compliant coverage as well, and indicate on their 1099-HC that their coverage did not comply with MCC standards.
You don't have to mail Forms MA 1099-HC to Medicare subscribers. This applies to both Supplemental or Replacement plans. You don't have to mail a Form MA 1099-HC to dependents either. However, you may choose to send separate forms to dependents.
In cases where residency is not clear (such as if the subscriber lives in Massachusetts for only a part of the year), you will decide for yourself whether to send a 1099-HC or not. However, a person's address for insurance purposes and tax purposes may be different. Be prepared to generate Form MA 1099-HCs for these people as needed.
You aren't required to provide only hard copies of 1099-HCs to subscribers. If they provide their consent to receive their 1099-HC in an electronic format, you can provide them with an electronic copy instead.
A number of attempts you make to deliver letters that are sent back as "undeliverable" via U.S. mail is your own decision. There is no tax information on the Form MA 1099-HC, so we have no position on mail returned from the post office.
Out-of-state insurance plans
If you're an out-of-state welfare fund (union-sponsored multi-employer health coverage provider), you need to issue 1099-HCs if you do business in the state (i.e., have employees working in Massachusetts) to your Massachusetts resident employees, regardless of where they work.
The statutory reporting requirements may not extend to you, but you can still report on behalf of your Massachusetts resident employees as a convenience to them.
While a resident who doesn't receive a 1099-HC can still complete and file a Massachusetts income tax return, we will automatically match to confirm if they comply with MCC standards.
If you provide them with 1099-HCs and verify coverage reports with us, you won't have to follow-up with employees.
If you are a carrier, employer, or another sponsor of employment-sponsored health plans who is obligated to issue Form MA 1099-HC but fail to do so, you could be subject to a penalty of $50 per individual you failed to issue the form to, up to a maximum of $50,000.
There are times when, due to the structure of benefits, how benefits are arranged, or because multiple vendors are involved in delivering the plan, carriers or third-party administrators need plan sponsors to certify that the total benefits package is MCC-compliant.
Plan sponsors can use an Attestation Letter to certify to a carrier or third-party administrator that the benefits package they provide to covered employees is indeed MCC-compliant, even if the part provided by the carrier on its own wouldn't be MCC-compliant. You or a third party administrator can use the Attestation letter to directly provide 1099-HCs to covered individuals and provide us with a list of Massachusetts residents who are covered by the MCC-compliant health benefits plan.
Insurance carriers and third-party administrators don't have to submit the Attestation letter to us. You should keep the attestation letters on file and make them available to us upon request. If you want to change something to make it easier to issue 1099-HCs, you can add to the Attestation letter as needed, but can't subtract from it.