California has its own health coverage reporting requirements that are separate from federal Affordable Care Act reporting and the deadline for the final part of the requirement is fast approaching. California rules support the state’s individual health care mandate, which requires California residents to maintain minimum essential coverage or potentially pay a state penalty.
For employers, this means federal ACA reporting may not be the end of the process. If an employer or plan provides minimum essential coverage to California residents, a separate filing with the California Franchise Tax Board may be required.
California generally uses the same federal Forms 1094 and 1095 that employers and coverage providers already prepare for ACA reporting. This includes Forms 1094-C and 1095-C for applicable large employers, as well as Forms 1094-B and 1095-B for certain coverage providers. However, the California filing is submitted to the state, not the IRS, and must be handled as its own reporting obligation.
Employers with self-funded health plans should pay particular attention to these rules. A self-funded employer that covers California residents may have a direct obligation to report coverage information to the Franchise Tax Board. For fully insured plans, the insurance carrier may report coverage information, but employers should still confirm how reporting responsibilities are being handled, especially if employees or covered dependents reside in California.
The standard California filing deadline is March 31 of the year following the reporting year. However, California grants an automatic two-month extension for filing ACA information returns with the Franchise Tax Board, moving the deadline from March 31 to May 31. The FTB states that entities must file applicable federal forms with the FTB by March 31, but they have an automatic extension until May 31, after which penalties may apply.
California may assess a penalty of $50 per individual who was provided health coverage if the required filing is not made after the extended deadline.
Another important issue is electronic filing. California requires electronic filing for entities required to file 10 or more information returns during the year, unless a waiver applies. The 10-return threshold is measured in the aggregate across certain information returns, so an employer may have an electronic filing obligation even if it has fewer than 10 California ACA forms.
Employers should also remember that California reporting is resident-based. The filing obligation is tied to California residents who were provided minimum essential coverage, not simply employees who work in California. This can include covered spouses and dependents who live in California.
Because California ACA reporting requires a separate state submission, employers should build it into their annual ACA process. This includes identifying California residents, confirming whether coverage was fully insured or self-funded, coordinating with carriers or reporting vendors, validating forms, and tracking state filing acknowledgments separately from IRS filings.
The May 31 automatic extension provides helpful additional time, but employers should not treat California reporting as an afterthought. Reviewing the filing population early and confirming who is responsible for submission can help avoid missed filings, rejected transmissions, and penalties.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.
