Does your agency have to file with California?
California requires entities that provide minimum essential coverage to California residents to report it to the Franchise Tax Board (FTB). In practice that means:
| Your situation | Who files | What gets filed |
|---|---|---|
| Fully insured group plan (you pay premiums to a carrier) | The carrier | You file nothing with the FTB; keep the carrier's confirmation |
| Self-insured or level-funded plan | You, the employer | Copies of the same Form 1095-C (Parts I–III) or 1095-B you prepare for the IRS |
| Out-of-state agency with California-resident caregivers on a self-insured plan | You, the employer | Same as above; residency of the covered person controls, not your headquarters |
| No plan offered | No one | Nothing to file with the FTB (but see the employer mandate below) |
Self-insured employers of any size are covered; this is not limited to ALEs. If you sponsor a level-funded plan, treat it as self-insured for this purpose.
California deadlines and penalties
| Date | Obligation | Applies to | Penalty |
|---|---|---|---|
| January 31 | Furnish coverage statements to covered California employees | Self-insured employers, carriers | FTB does not assess a penalty for late furnishing |
| March 31 | File 1095 data with the FTB | Self-insured employers, carriers | None if received by May 31 |
| May 31 | End of automatic extension | Same | $50 per covered individual for filings after this date |
The FTB does not require a separate form. Self-insured sponsors submit the 1095-C they already complete for the IRS, so there is no new recordkeeping, only a second submission.
Is your agency an Applicable Large Employer?
Count full-time employees (30+ hours a week or 130+ a month) and add full-time equivalents from everyone else: total part-time hours in the month ÷ 120. Average the monthly totals over the prior calendar year.
Worked example. A California agency has 42 caregivers and office staff at 130+ hours a month, plus 20 part-time caregivers averaging 54 hours a month.
- Full-time employees: 42
- Part-time FTEs: 20 × 54 = 1,080 hours ÷ 120 = 9
- Total: 51 → the agency is an ALE.
Two home care specifics. Entities under common ownership are combined under the controlled-group rules, so multiple agency LLCs or franchise territories with the same owners count as one employer. And caregivers with variable hours can be classified using the IRS look-back measurement method (a 3–12 month measurement period followed by a stability period), which is how most agencies decide who must be offered coverage without re-running the math every month.
What an ALE owes if it doesn't comply (2026 amounts)
- 4980H(a), no offer: if you don't offer minimum essential coverage to at least 95% of full-time employees and any one of them gets a subsidy on Covered California, you owe $3,340 per full-time employee minus the first 30. In the example above: (42 − 30) × $3,340 = $40,080 a year, triggered by a single subsidized caregiver.
- 4980H(b), unaffordable offer: if you offer coverage that's unaffordable or below minimum value, you owe $5,010 for each full-time employee who enrolls in a subsidized marketplace plan.
Which California caregivers can actually trigger a penalty
Penalties are only triggered when a full-time employee actually receives a premium tax credit on the marketplace. Who can get one depends on income:
| Caregiver household income | Can they get a marketplace subsidy? | Can they trigger a penalty for you? |
|---|---|---|
| Below 138% FPL | No. California expanded Medicaid, so adults to 138% FPL qualify for Medicaid and cannot receive a marketplace credit | No |
| 138%–400% FPL | Yes | Yes — each one is a potential $5,010 (b) trigger, or the single trigger for the (a) penalty |
| Above 400% FPL | Generally no in 2026, now that the enhanced credits have expired | No |
California runs Covered California, a state-based exchange with state premium subsidies, and has its own individual mandate penalty administered by the Franchise Tax Board. coveredca.com ↗
What counts as "affordable" for a California caregiver in 2026
Coverage is affordable if the caregiver's self-only contribution is no more than 9.96% of household income. Since you can't know household income, the IRS provides three safe harbors:
| Safe harbor | How it's calculated | 2026 monthly ceiling for a California caregiver |
|---|---|---|
| Federal poverty line | FPL × 9.96% ÷ 12 | $129.89 regardless of wage |
| Rate of pay | Lowest hourly rate × 130 hours × 9.96% | $218.82 at the $16.90 minimum |
| W-2 wages | 9.96% of Box 1 wages | Varies; known only after year-end |
The California-specific point: because the state minimum wage is $16.90, the rate-of-pay safe harbor gives California agencies far more room than the $129.89 FPL figure most national guides quote. An agency paying $16.90 can charge up to $218.82 a month for self-only coverage and still be safe from the (b) penalty. Use each caregiver's actual lowest hourly rate; where local minimums are higher, the ceiling is higher still.
A CHOICE (formerly known as ICHRA) counts as an offer of coverage. It's affordable if the caregiver's cost for the lowest-cost self-only silver plan on Covered California for their rating area, minus your monthly allowance, stays within the 9.96% test.
IRS Rev. Proc. 2025-25 ↗ · IRS HRAs ↗ · minimum wage → see the California wage & hour page
2026 compliance calendar: California and federal together
| Date | Obligation | Who | Authority |
|---|---|---|---|
| Ongoing | Track caregiver hours under your measurement/stability periods | ALEs | IRS |
| Mar 2, 2026 | Furnish Form 1095-C to full-time employees, or post a website notice and furnish within 30 days on request | ALEs | IRS |
| Mar 31, 2026 | E-file Forms 1094-C/1095-C with the IRS (e-filing required at 10+ returns) | ALEs | IRS |
| Jan 31, 2026 | Furnish California coverage statements | Self-insured employers, carriers | FTB (no penalty if late) |
| Mar 31, 2026 | File 1095 data with the FTB | Self-insured employers, carriers | FTB |
| May 31, 2026 | FTB penalty-free filing window closes | Same | FTB |
The California rows apply to self-insured/level-funded sponsors (and to every employer for any item marked as such above); the IRS rows apply to ALEs. If you also employ caregivers who live in other reporting states under a self-insured plan, see the state-by-state ACA hub.
Other California benefit mandates that touch home care agencies
These aren't ACA rules, but they land on the same desk.
- CalSavers auto-IRA (1+ employees). CalSavers applies to all employers with at least one W-2 employee that do not sponsor a retirement plan; the final registration deadline for employers with 1-4 employees was December 31, 2025, so every non-exempt home care agency should now be registered or offering its own plan. employer.calsavers.com ↗
- SDI + Paid Family Leave. California SDI/PFL is employee-funded through payroll withholding with no taxable wage ceiling (since 2024); PFL pays up to 8 weeks, and SB 951 raised wage replacement to 70-90% of wages for claims beginning 2025. Employers must withhold and remit through EDD payroll filings. edd.ca.gov ↗
- Cal-COBRA. Cal-COBRA extends continuation coverage to employees of insured groups with 2-19 employees and adds coverage after federal COBRA, for up to 36 months total. dmhc.ca.gov ↗
Frequently asked questions
My plan is fully insured. Do I file anything with the FTB?
No. The carrier reports covered California residents. Keep a copy of the carrier's filing confirmation in case of an FTB inquiry.
We're based in Nevada but have caregivers who live in California. Does California reporting apply?
If those caregivers are covered under a self-insured plan, yes. The FTB rule follows the covered person's California residency, not the employer's location.
We missed March 31. Is the $50 penalty automatic?
No. The FTB's automatic extension runs to May 31; the penalty applies to filings after that date.
We have 48 full-time caregivers and a handful of part-timers. Are we under the threshold?
Probably not. Add the part-timers' monthly hours and divide by 120. Two part-timers at 120 hours a month between them add one FTE, which puts you at 49; a third pushes you to 50 and ALE status the following year.
Can a caregiver on Medicaid trigger a penalty against us?
No. Penalties are triggered only by full-time employees who receive a marketplace premium tax credit. California caregivers below 138% FPL qualify for Medicaid instead, so they can't trigger 4980H. Caregivers between 138% and 400% FPL can.
We pay the California minimum of $16.90. What's the most we can charge for self-only coverage?
Under the rate-of-pay safe harbor, $16.90 × 130 hours × 9.96% = $218.82 a month in 2026. That's well above the $129.89 FPL figure, so rate of pay is the better harbor for California agencies.
Not legal advice. Confirm details with the cited official sources or counsel. Full disclaimer
- https://edd.ca.gov/en/disability/employer_requirements/
- https://employer.calsavers.com/home/employers/program-details.html
- https://www.coveredca.com
- https://www.dmhc.ca.gov/HealthCareinCalifornia/TypesofPlans/KeepYourHealthCoverage(COBRA).aspx
- https://www.ftb.ca.gov/about-ftb/newsroom/health-care-mandate/
- https://www.ftb.ca.gov/file/business/report-mec-info/index.asp
- https://www.hubinternational.com/products/employee-benefits/compliance-bulletins/2026/01/state-health-insurance-reporting-requirements-and-deadlines-2025/
- https://www.irs.gov/affordable-care-act/employers/identifying-full-time-employees
- https://www.irs.gov/affordable-care-act/employers/information-reporting-by-applicable-large-employers
- https://www.irs.gov/newsroom/health-reimbursement-arrangements-hras
- https://www.irs.gov/pub/irs-drop/rp-25-25.pdf
- https://www.irs.gov/pub/irs-drop/rp-25-26.pdf