Even though the Affordable Care Act’s individual mandate penalty is $0, Massachusetts requires its residents to maintain a minimum level of health coverage to avoid a state individual mandate penalty. Taxpayers in Massachusetts must indicate if they maintained Minimum Creditable Coverage (MCC) as required by the Massachusetts Health Care Reform Law when completing their Massachusetts personal income tax returns using Schedule HC. Massachusetts taxpayers who do not maintain MCC for themselves and their dependents throughout the year, and who do not qualify for an exception, are subject to state income tax penalties. While the law requires Massachusetts residents to maintain MCC, it does not actually require employers to offer it.
This Alert addresses the basic MCC requirements, how plans can qualify, related disclosure requirements, and the penalties for Massachusetts residents that fail to maintain MCC. This Alert is appropriate for employers that employ Massachusetts residents.
