California Individual Mandate:

Reminder of Reporting Deadline for Certain Employers

Background

Starting on January 1, 2020, California (CA) enacted its own individual mandate similar to the repealed federal individual mandate that requires residents and their dependents to obtain and maintain minimum essential coverage.

The new CA mandate also brings along reporting requirements for certain employers that meet both of the following conditions:

1. offers medical insurance to CA workers
2. required to report ACA forms (1094/1095-B or C forms)

What is it? Employers offering medical insurance to CA workers must ensure ACA reporting forms are submitted to the Franchise Tax Board (FTB) of California. This information is used by the state of CA to reconcile data and impose penalties on individuals, as applicable.

IMA Note: CA rules originally required information statements (generally, 1095-Cs) to be provided to individuals by January 31 which is earlier than the federal deadline (March 3 in 2025). However, the FTB website states that penalties will not be assessed for failure to provide statements by January 31.

Who must comply? All employers with CA workers must ensure compliance. However, the medical carrier/insurer typically reports on behalf of a fully insured medical plan alleviating the reporting burden for these plan sponsors.

Self-insured medical plans generally need to take action to report.

Are there any exceptions? No, and note that the requirement also includes non-CA employers offering coverage to CA residents.

Who will report on behalf of the self-insured medical plans? It’s possible payroll vendors or TPAs can assist employers with state-level reporting. However, the employer is ultimately responsible for ensuring compliance and may have to take steps to report as noted below.

How does my organization report? Click on the link here to get started.

What information is my organization reporting to the CA FTB? The employer will use the same forms used to report information to the IRS:

• 1094-B & 1095-B – used by small (non-ALE) employers who sponsor self-insured medical plans
• 1094-C & 1095-C – used by ALEs

What is the deadline to report? Effectively, the deadline is annually by May 31.

Forms must be filed with the FTB or postmarked if mailed annually by March 31; however, an automatic two-month extension is granted for filing forms with the FTB, making the effective deadline May 31st.

After that date, the FTB may assess a penalty of $50 per individual who was provided health coverage.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.

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