With the New Year well underway, organizations with operations in California should give special attention to the state’s Individual Mandate and the additional ACA reporting requirements.
Employers that offer self-funded healthcare plans and health insurance carriers must furnish healthcare information to their employees and their dependents by this coming Monday, January 31, 2022.
These ACA responsibilities are required under the state’s Individual Mandate, which first went into effect 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 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 for how to file both 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 electronically submit the filings.
The deadline for filing this information is March 31, 2022, though penalties will not be assessed until after May 31, 2022.
Employers that fail to comply with California’s Individual Mandate reporting requirements will face a $50 penalty per individual who was provided 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, 2022, 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 $800 per California adult, and $400 per child for the 2021 tax year.
Employers should take note that California’s ACAreporting 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.
If your organization needs assistance completing the state reporting requirements, or federal, contact us to learn about our comprehensive, full-service ACA Complete solution.
If your business needs assistance meeting their ACA filing deadlines this year, contact us to learn about ACA Complete. Our all-in-one service can keep track of your workforce’s employment periods, help establish affordability and file and furnish Forms 1094-C and 1095-C annually.