With the New Year well underway, organizations with operations in California should give special attention to the state’s Individual Mandate and its additional ACA reporting requirements.
Employers offering self-funded healthcare plans and health insurance carriers must furnish 1095-C healthcare information to their employees and their dependents by today, Tuesday, January 31, 2023.
California introduced these additional ACA reporting responsibilities as part of its Individual Mandate in 2020.
Under the California Individual Mandate, applicable organizations must also file ACA information on their employees and their dependents to the California Franchise Tax Board (FTB). The ACA information should include enrollee healthcare details for all persons enrolled in the coverage, including non-employees such as dependents, spouses, and COBRA beneficiaries.
The instructions indicate that self-insured ALEs have the option to submit either:
- IRS Forms 1094-B and 1095-B or
- Forms 1094-C and 1095-C with Part III in the 1095-C completed for non-employees
Organizations have the option to file this information both electronically and by physical paper mail. However, employers that have more than 250 returns, must file their ACA information electronically.
The FTB website outlines steps to file electronically and via physical mail. The California instructions for filing federal forms publication details how to physically mail your filings and the FTB’s Minimum Essential Coverage Information Reporting page dives into how to submit the filings electronically.
The deadline for filing this information is March 31, 2023, though penalties will not be assessed until after May 31, 2023.
Employers that fail to comply with California’s Individual Mandate reporting requirements will face a $50 penalty per individual who received health coverage.
As a reminder, California Individual Mandate non-compliance information will subsequently be published on the FTB’s website as required by the statute. Accordingly, the state agency will publish the non-compliance information by March 1, 2023, and every March 1 thereafter.
The reporting responsibilities for self-insured employers and health insurance carriers reinforce California’s Individual Mandate requirement for state residents to obtain and maintain qualifying healthcare coverage. By submitting the healthcare enrollee information reporting, the state can verify who received coverage and impose penalties accordingly.
State residents who fail to obtain and maintain healthcare coverage could be subject to a penalty of $850 per California adult, and $425 per child for the 2022 tax year.
Organizations should note that California’s ACA reporting requirements are in addition to the ACA’s Employer Mandate.
Under the ACA’s Employer Mandate, ALEs, or employers with 50 or more full-time employees and full-time equivalent employees must:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability
For more information on state ACA reporting responsibilities to be completed in the coming weeks, check out our interactive guide below.
If you need assistance with ACA reporting, both state and federal, contact Trusaic. Our full-service ACA compliance solutions handle everything for you while minimizing penalty risk and the hassle of measuring which employees require an offer of coverage.
Missing an ACA filing or furnishing deadline could land your organization a significant penalty from the IRS. To ensure you never miss one, download the ACA 101 Toolkit, which documents the various federal and state reporting deadlines.
