An Overview of State-Mandated ACA Reporting for California
Since the federal individual mandate was eliminated by Congress, there has been a lot of movement at the state level. Many states have implemented their own individual mandates that their residents and business entities operating in this state must abide by.
One of these states is California, as of January 1, 2020, their individual mandate went into effect.
This is what employers need to know going forward with their ACA reporting for the 2021 tax year.
What is the California Individual Mandate?
The California individual mandate states that all residents and their dependents must be enrolled in a minimum essential coverage (MEC) plan for each month of the calendar year to avoid a penalty from the state.
What are employers in California responsible for?
Employers of California that are providing health insurance to residents of California are required to complete Forms 1094-B/C and Form 1095-B/C. These are the same forms that are required by the IRS.
Employers are also required to distribute copies of the ACA forms to their employees/recipients.
Form 1094-C and Form 1095-C are required to be filed with the California Franchise Tax Board by all self-insured applicable large employers (ALEs). These are self-insured employers with 50 or more full-time or full-time equivalent employees.
Full-time equivalent employees are a combination of part-time employees that together work enough hours to equal one full-time employee. These individuals must be included in the organization’s employee account.
For example, if a business has 49 full-time employees and two part-time employees. If the combined hours worked by these part-time employees adds up to a total of 30 hours a week or 120 hours a month, they count as one employee. This brings the total number of full-time employees to 50. This would make the business an ALE.
Forms 1094-B and Form 1095-B should be filed by non-ALEs. This can include businesses that are self-insured, third-party administrators, and insurance companies.
What are the deadlines for filing with California?
As of now, the deadline to distribute employee/recipient copies of Forms 1094-B/C and 1095-B/C is January 31, 2022.
The deadline to file with the California Franchise Tax Board is March 31, 2022. This is the same as the federal deadline to file with the IRS.
Meet your State Mandated Filing Requirements with ACAwise
As a full-service ACA reporting provider, ACAwise is here to alleviate the stress of your federal and state requirements. Additionally, we offer solutions for TIN Matching, distribution of recipient copies, and a series of data validations to ensure the accuracy of your forms.
To learn more about our customized services, reach out to our team of experts at [email protected] or give us a call at 704.954.8420.
