The ACA Times


  Show menu
  • Home
  • Articles
  • Get to Know the ACA
  • ACA – Frequently Asked Questions
  • Resources
  • Meet the Editors
  • Trusaic
  • Contact Us
  • Legal
  
  • Home
  • Affordable Care Act
  • More ACA Complexity: California Releases Draft Instructions Diverge From ACA Employer Reporting

Articles

More ACA Complexity: California Releases Draft Instructions Diverge From ACA Employer Reporting

July 29, 2020 Joanna Kim-Brunetti Affordable Care Act
More ACA Complexity: California Releases Draft Instructions Diverge From ACA Employer Reporting

2 minute read:

With the zeroing out of the ACA’s “Individual Mandate,” which required individuals to have minimum essential health coverage through the enactment of the Tax Cuts and Jobs Act of 2017, California passed SB 78 (creating California’s “Minimum Essential Coverage Individual Mandate”) to create a state individual mandate, effective January 1, 2020. The Franchise Tax Board (FTB) is tasked with enforcement of this California Minimum Essential Coverage Individual Mandate. California residents who fail to comply are subject to monetary penalties.

To facilitate the identification of individuals who have not complied with the California Minimum Essential Coverage Individual Mandate, the FTB has imposed state employer reporting obligations. To that end, the FTB released draft instructions for California’s 2020 Form 3895C Instructions. The 3985C Instructions are directed to employers that offer health coverage through a self-insured plan and that are subject to the ACA’s Employer Mandate.

Under the Employer Mandate, an employer with 50 or more full-time employees and full-time equivalent employees) is an Applicable Large Employer (ALE), which is required to offer Minimum Essential Coverage (MEC) to at least 95% of its full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties. An ALE must report its status of compliance with the Employer Mandate coverage through the annual filing of Internal Revenue Service (IRS) Forms 1094-C and 1095-C and furnishing to employees of Forms 1095-C. With respect to non-employees (e.g., spouses and dependents), the self-insured ALE has the option of submitting IRS Forms 1094-B and 1095-B or Forms 1094-C and 1095-C with Part III in the 1095-C completed for those non-employees. If the ALE only offers fully-insured plans, the ALE need not complete Part III of the Form 1095-C.

The FTB requires the self-insured ALE has the option of submitting (a) IRS Forms 1094-B and 1095-B or (b) Forms 1094-C and 1095-C with Part III in the 1095-C completed for those non-employees.

Although the previously filed Forms 1094-C and 1095-B may be submitted to satisfy the California 3895C instructions, there are notable variations. On the Form 1094-C, ALE membership information is not required, i.e., Part II (ALE Member Information), III (ALE Member Information – Monthly), and IV (Other ALE Members of the Aggregated ALE Group) of Form 1094-C need not be completed. If completed, the FTB will disregard. Additionally, the “authoritative transmittal” question (line 19) in Form 1094-C need not be answered. All of the information required in Form 1095-C by the IRS will be required by the FTB.

The annual FTB filing deadline is March 31. The FTB furnishing deadline is January 31. The IRS of electronic filings for returns of 250 or more apply but may be subject to a hardship waiver.

Several other jurisdictions, including D.C., Massachusetts, New Jersey, Rhode Island, and Vermont have introduced their own state individual mandates. Many of them have also imposed penalties on employers and residents that fail to comply. You can read about them here.

To learn more about ACA compliance in 2020, click here.


We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.

Summary
More ACA Complexity: California Releases Draft Instructions Diverge From ACA Employer Reporting
Article Name
More ACA Complexity: California Releases Draft Instructions Diverge From ACA Employer Reporting
Description
Adding to the ACA compliance complexity, California issues draft instructions for employers to report their offers of health coverage to their employees as required under the ACA Employer Mandate with some variations.
Author
Joanna Kim-Brunetti
Publisher Name
The ACA Times
Publisher Logo
The ACA Times
Short URL of this page: https://acatimes.com/tdx
Joanna Kim-Brunetti

Joanna Kim-Brunetti

Joanna Kim-Brunetti, Esq., is Vice President of Regulatory Affairs for Trusaic.

View more by Joanna Kim-Brunetti

Related tags to article

1094-C1095-CACA ComplianceACA Employer MandateACA Individual MandateACA ReportingAffordable Care ActApplicable Large Employer (ALE)CaliforniaCalifornia’s “Minimum Essential Coverage Individual MandateCalifornia’s 2020 Form 3895C InstructionsForm 1094-CForm 1095-CFranchise Tax Board (FTB)Health Care CoverageIRC Section 4980H PenaltiesIRSMinimum Essential Coverage (MEC)Minimum Value (MV)SB 78Tax Cuts and Jobs Act of 2017
Related Articles Three Essential Pay Equity Practices, According to Iceland Three Essential Pay Equity Practices, According to Iceland
Related Articles DFEH Adds New Guidance for SB 973 Reporting Due on March 31 DFEH Adds New Guidance for SB 973 Reporting Due on March 31
Related Articles Georgia Results May Have Impact on Federal Pay Equity Law Georgia Results May Have Impact on Federal Pay Equity Law
Related Articles Administration Predicts Lower ACA Enrollment by Robert Sheen  •  
Related Articles IRS Eases Rules on Hardship Exemptions by Robert Sheen  •  
Related Articles HHS Awards $36 Million To Health Centers by Robert Sheen  •  
Essential ACA Guide for Employers 2020
Subscribe
Clean data owns future

Achieve Pay Equity

Popular Posts

  • New Individual Mandate Regulations: What You Need to Know
  • Employers, Mark These Key 2021 Dates for 2020 ACA Reporting
  • ACA Improvements to Expect from the Biden Administration
  • Minimize Penalties with ACA Best Practices for the Holiday Season
  • The ACA is Central to American Health and Wellbeing
  • Democrats Gain Senate, Paving the Way for Biden’s ACA Agenda
  • PPP Loans Are Now Available, Both First Draw and Second Draw PPP Loans

Trending Topics

  • Regulations
    (91)
  • Legislation
    (47)
  • Editorials
    (19)
  • ACA Compliance
    (126)
  • Tax Filings
    (19)
  • Applicable Large Employer (ALE)
    (13)
  • Penalties
    (18)
  • IRS
    (82)
  • Health Insurance Marketplace
    (28)
  • Polls/Surveys
    (18)
  • Health Care Reform
    (22)
  • Reporting
    (22)
  • IRS 226J/226-J
    (28)

Categories


Brought to you by Trusaic

 

 

 

Twitter Facebook

Downloads

The ACA 101 Toolkit

The Essential Guide to the ACA

Letter 226J Infographic

5 Common ACA Compliance Mistakes

Triangle of Trust

Articles

IRS Affordability Safe Harbors Help Avoid ACA Penalties

Calculating FT and FTE Employees

The ACA Monthly Measurement Method: A Few Examples

The IRS’s 1095 Forms for ACA Explained

Incorrect ITINs Will Cause Havoc With ACA Compliance

Knowledge Center

Get to know the ACA

Get to know Letter 226J

Webinar: The Recipe for Successful ACA Compliance

Trusaic News

Our Story

© 2021 Copyright Trusaic - All Rights reserved.

Close Window

Loading, Please Wait!

This may take a second or two. Loading, Please Wait!