California Individual Mandates
ACA Reporting Requirements

California Individual Mandate - An Overview

- Updated August 29, 2023 - 8.00 AM by Admin, ACAwise

After eliminating federal individual mandates under the Affordable Care Act (ACA) by Congress, California has passed the state individual mandate and is effective from January 1, 2020.

The California Individual Mandate requires its residents and their dependents to have “Minimum Essential Coverage” for each month of the calendar year or pay a penalty.

Minimum Essential Coverage (MEC) defined under California Health and Safety Code Section 1345.5, requires the individual to maintain ten categories of essential health benefits and services to comply with the Affordable Care Act’s (ACA) individual mandate or face a penalty.

The penalty for failing to comply with the ACA’s shared responsibility provision (individual mandate) throughout the tax year is calculated at a rate of $750 per adult and $375 per child or 2.5% of gross income above the California tax filing threshold, whichever is higher.

Employer Responsibility for California Individual Mandates

Employers who provide MEC to California residents are required to submit a return to the state, indicating that their employees (California residents) had qualified health insurance coverage throughout the year. They must also distribute copies to their employees.

Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) must offer qualified MEC to at least 95% of their full-time employees (and their dependents). Otherwise, the ALE will be subject to Internal Revenue Code (IRC) Section 4980H penalties. The IRS is issuing these penalties to employers using Letter 226J.

What Form To File?

In-state and out-of-state employers who employ California residents must file the same information found in the 1094 and 1095-B / 1095-C federal forms to the state and distribute the copies to employees (California residents) so that they can complete their individual tax returns.

For employers with fully insured plans, most insurance carriers will submit Forms 1094 and 1095 to the state and distribute copies to the employees on behalf of the employers. However, if their insurance carrier fails to do this, employers are responsible for fulfilling these obligations to
avoid penalties.

For employers with self-insured plans, the employer is responsible for submitting Forms 1094 and 1095 to the state and distributing copies of the form to their employees.

When to File?

Jan 31st

The deadline to distribute copies of Form 1095-B/C to employees:

January 31, 2024 - Employers must distribute written statements (Form 1095-B/C) to employees (and former employees who covered during the prior plan year) on or before the deadline.

Apr 01st

The deadline to File Form 1094 & 1095-B/C to the State

April 01, 2024 - Employers are required to file Form 1094 & 1095-B/C to the California Franchise Tax Board (FTB) on or before this deadline.

What Information to Report?

To file Forms 1095 &1094-B/C with the State and distribute copies to the residents of California, the employer must need the following:

  • Name, address, and SSN/TIN of the covered individual.
  • Name, address, EIN, and contact info of the plan provider.
  • For self-insured group health plans, the name, address, EIN, and contact information of the plan sponsor.
  • The offer of coverage code for each recipient/employee, broken down by month
  • The recipient/employee’s premium share of coverage, by month
  • Any safe harbor relief codes that are applicable
  • The covered individual's spouse and dependent(s) information, if applicable (name, SSN or DOB, and months covered)

The Penalties for Failure to File

By filing, states can able to determine whether the employer offered MEC to California residents or not. Employers who fail to file Form 1095 & 1094 will be subject to a $50 penalty per individual.

Meet California Individual Healthcare Mandates Reporting Requirements

ACAwise is a comprehensive ACA reporting solution that completely takes care of California’s individual healthcare mandate reporting requirements for employers.

With extensive experience in handling the e-filing of both the federal ACA reporting and the state individual mandate reporting, ACAwise can quickly and accurately report your Health Care Coverage information for California without any additional effort from your end.

Send us your employee’s payroll, benefits, and census data through an excel template or use our own template. We will generate the Forms 1094 & 1095 and e-file it with the IRS and California. We also handle the distribution of your IRS Form 1095 copies to your employees before the
recipient copy deadline.

Get Started with ACAwise to simplify your California State Mandate ACA reporting.

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