California Individual Mandate – Impending Reporting Deadline for Employers

Starting on Jan. 1, 2021, California (Calif.) enacted its own individual mandate similar to the repealed federal individual mandate that requires residents and their dependents to obtain and maintain minimum essential coverage.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 Calif. mandate also brings along a reporting requirement for employers.

Notably, employers who offer medical coverage to Calif. residents must provide 1095-C statements to employees by Jan. 31 which does not coincide with the federal extension. At this time, Calif. has not issued plans to provide an extension on this date.

There is a separate requirement specific to self-insured medical plans. This reporting is necessary because the State of Calif. needs to be able to reconcile which individuals were covered for purposes of assessing a penalty to its residents.

Employers with fully insured medical plans can rely on their carriers to report the appropriate information to the State of Calif. via the 1095-B form.

Employers with self-insured medical plans offered to Calif. residents must report annually to the Franchise Tax Board (FTB) of California. More information is below.

Who must comply?  Employers with self-funded medical plans covering Calif. residents.

Who will report on behalf of the self-insured medical plans Generally, it is the employer’s responsibility. However, employers may partner with their payroll vendors to transmit this information.

Are there any exceptions? No. It also includes non-Calif. employers offering coverage to Calif. residents.

How does my organization report? Click this link to get started.

What information is my organization reporting to the Calif. FTB? The employer will use the same 1094/1095-C forms used to report information to the IRS.

What is the deadline to report? Forms must be filed with the FTB or postmarked if mailed by March 31. An automatic two month extension is granted for filing forms with the FTB, making the final deadline May 31.

The penalty for failure to file a correct information return is $50 per individual included on a return for which the failure occurs.

Bottom Line:

Employers with self-insured medical plans should ensure compliance by the reporting deadline of May 31.

All employers offering medical coverage to Calif. residents should ensure 1095-C statements are provided to employees by the Calif. reporting deadline of Jan. 31, 2020.

About Michelle Cammayo

Michelle Cammayo has more than 13 years of Employee Benefits experience specializing in all lines of health and welfare benefits. Today, Michelle works closely with clients and partners to provide guidance in areas of the law including ERISA, HIPAA, COBRA, FMLA and PPACA. She also oversees the Compliance Department at Bolton & Company to ensure we are helping our clients manage and eliminate risk with regards to employee benefit compliance.

Subscribe to the Bolton Blog