Rhode Island Individual Mandate & Reporting Requirements

 

Effective in 2020, Rhode Island’s individual mandate requires most individuals in the state (and their family members) to be covered under minimum essential coverage (MEC) for each month of the year, or pay a penalty. Rhode Island’s state individual mandate largely mirrors the federal individual mandate requirement under the Affordable Care Act (ACA), which was effectively eliminated beginning in 2019.

 

Notably, the law provides that the state individual mandate penalty will not be enforced for any tax year in which the ACA’s federal premium tax credits become unavailable or the federal individual mandate penalty is assessed. To help administer the individual mandate penalty, Rhode Island also imposes a reporting requirement on every entity that provides MEC to an individual during a calendar year, similar to the ACA’s reporting requirement under Internal Revenue Code Section 6055.

 

Minimum Essential Coverage

 

For purposes of the Rhode Island individual mandate, minimum essential coverage (MEC) has the same definition as under the ACA. MEC includes coverage under:

 

 

The Penalty Amount

 

Rhode Island’s individual mandate penalty is calculated in the same manner as the ACA’s individual mandate. The penalty is the greater of two amounts—the flat dollar amount ($695) or the percentage of income amount (2.5% of income). For purposes of calculating the penalty, income is the taxpayer’s household income minus any exemption (or exemptions, for a married couple) and standard deductions.

 

Families will pay half the penalty amount for children, up to a family cap of three times the annual flat dollar amount. The penalty is capped at the Rhode Island statewide average premium for bronze-level plans offered through the Rhode Island health benefits Exchange. Also, individuals are required to indicate on their state income tax return whether they (and their family members) had MEC for each month of the year.

 

Affected Individuals

 

The requirement to maintain MEC applies to individuals of all ages (including children), unless that individual is exempt. An individual is treated as having coverage for a month if he or she has coverage for any one day of that month. Similarly, an individual who is eligible for an exemption for any one day of a month is treated as exempt for the entire month.

 

The following categories of individuals are exempt from the Rhode Island individual mandate penalty:

 

 

Reporting Requirement

 

To help administer the individual mandate penalty, Rhode Island imposes a reporting requirement on every entity that provides MEC to an individual during a calendar year. This reporting was originally due by Jan. 31 of each year, but was permanently extended to March 31 starting in 2023, to align with the ACA’s reporting deadlines.

 

Files may be submitted on the Rhode Island Division of Taxation’s website. The following two options are available for submitting this information to the Division of Taxation:

 

 

 

Affected entities are also required to provide a written statement to the primary insured. The statement must contain the name, address and contact information of the affected entity and the information included in the return with respect to the individuals listed. Starting in 2023, this deadline has been permanently extended to March 2 of each year.