Form 3853 Exemption Certificate Number: Apply, Enter, and Appeal

To get an Exemption Certificate Number for Form FTB 3853, you apply directly to Covered California, not to the Franchise Tax Board. Only three exemptions require this number: general hardship (Code K), religious conscience (Code L), and unaffordable coverage based on projected income (Code M). Every other health coverage exemption is claimed straight on the tax return by entering a code, no Marketplace approval needed.¹²

Because Covered California has up to 30 calendar days to decide, timing matters. Apply well before you plan to file.

Which Exemptions Actually Need an ECN

Most exemptions on Form 3853 don’t need an ECN at all. A short coverage gap of three months or less, income below the filing threshold, incarceration, membership in a health care sharing ministry, and membership in a federally recognized tribe are all claimed by entering the appropriate code (or checking a box) on the form itself.¹

The three exemptions that do require an ECN from Covered California are:²

General hardship (Code K), which covers situations like homelessness, eviction or foreclosure, domestic violence, death of a close family member, natural disaster damage, bankruptcy, unpayable medical bills, or unexpected caregiving costs.
Religious conscience (Code L), for members of a recognized religious sect that objects to insurance.
Unaffordable coverage based on projected income (Code M), where Covered California determines no available plan was affordable given your projected household income.

If your situation is one of these three, you must have an ECN before claiming the exemption. Without one, the FTB will treat those months as unexempted and assess the penalty.

How to Apply to Covered California

Applications go to Covered California online, by fax, or by mail. Each exemption type has its own form, with the specific requirements laid out in the application itself. If you need help, the phone line is (800) 300-1506.²

For a general hardship exemption, you’ll need documentation proving the hardship happened. Eviction requires the eviction notice. Bankruptcy needs court filings. Medical debt needs billing records. Two hardships are treated differently: homelessness and domestic violence require no supporting documentation beyond your attestation.³

Once Covered California has a complete application, it has up to 30 calendar days to decide. You’ll get a determination letter by mail that either approves the exemption, denies it, or asks for more information. Exemptions are granted per person, so a single household application can come back with some members approved and others denied. Each approved individual gets their own ECN, so keep track of which number belongs to whom.²

Entering the ECN on Form 3853

With the ECN in hand, the form is straightforward. In Part I, list each household member who needs to report a coverage gap and enter the ECN assigned to that person in the space provided. This links the individual to the exemption Covered California approved.¹

Then go to Part III, a month-by-month grid. For every month the person lacked coverage but was covered by the ECN, enter the matching code: K for general hardship, L for religious conscience, M for unaffordable coverage. Months when the person actually had insurance stay out of the code grid.¹

Hardship exemptions typically cover the month before the hardship began, the months during it, and the month after it ended. Enter Code K only for those eligible months, not the whole year, unless the hardship actually ran twelve months.

Attach the completed Form 3853 to your state return: Form 540 for residents, Form 540NR for nonresidents or part-year residents, or Form 540 2EZ. E-filing sends the form and ECN data electronically. For paper returns, include the form in the mailed packet.¹

Filing When the Application Is Still Pending

If the tax deadline arrives before Covered California finishes its review, you can still file on time. Enter the word PENDING in the ECN field on Part I of Form 3853 for each person with an unresolved application.¹

The better move is to apply as early as possible so the determination arrives well before April. Waiting until March to submit a first-time application leaves very little margin.

If Covered California Denies the Exemption

A denial gives you two paths. You can appeal by filing a Request for a State Fair Hearing with Covered California.⁴

If the denial stands and you already filed with “PENDING” in the ECN field, file an amended return (Form 540X) and pay the penalty for the uncovered months. The FTB will eventually match a pending entry against Covered California’s records, and handling it yourself is easier than responding to a notice later.

How Long to Keep the Determination Letter

Hold onto the original letter containing your ECN for at least four years after filing. Standard IRS guidance is to keep records for three years from the filing date or two years from the payment date, whichever is later.⁵ California’s statute of limitations for tax assessments generally runs four years from the filing date, so four years covers you if the FTB questions the exemption later.

A Quick Note on the Penalty

The reason to bother with any of this is the individual mandate penalty. For 2025, it starts at $950 per uninsured adult and $475 per uninsured child under 18, with a family cap of $2,850 on the flat amount, and California uses the larger of that flat amount or 2.5% of household income above the filing threshold, capped by the state average bronze plan premium.⁶⁷ The penalty scales with the number of uncovered months, which is what Form 3853 calculates. If you had qualifying coverage every month, skip Form 3853 entirely and check the full-year coverage box on your return (line 92 on Form 540).

1
California Franchise Tax Board. 2025 Instructions for Form FTB 3853
2
Covered California. Exemptions
3
Covered California. Exchange Hardship and Religious Conscience Exemptions Process Permanent Regulations
4
Covered California. File an Appeal or a Complaint
5
Internal Revenue Service. How Long Should I Keep Records
6
State of California Franchise Tax Board. California Health Care Mandate
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California Legislative Information. California Revenue and Taxation Code RTC 61015