Mastering Form 1095-C: The Essential Guide

Form 1095-C provides information to both the IRS and the employees regarding health coverage offered by an employer to each employee.

Form 1095 C Image with Border
Image of Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

What is Form 1095-C?

For employers, Form 1095-C combined with Form 1094-C is used to determine whether an Applicable Large Employer (ALE) owes an employer shared responsibility provision (ESRP) payment under IRS section 4980H. For employees, this form is used in determining eligibility for the premium tax credit.

An ALE is generally an employer with 50 or more full-time or full-time equivalent employees within the previous year. This can also be an Aggregated ALE Group, which is a group of employers that, combined, employed 50 or more full-time or full-time equivalent employees in the previous year on average. Each employer within this group is an ALE Member. 

A 1095-C must be completed for each individual that was a full-time employee for any month of the calendar year. It must also be provided to each individual.

Who needs to file Forms 1095-C with the IRS?

Each ALE, or ALE Member, must file Forms 1094-C and 1095-C reporting offer of coverage to its employees, even if the ALE Member has fewer than 50 full-time employees on its own. There must be a Form 1095-C for each employee that was full-time for any month of the calendar year, and a copy of the form must be furnished to the employee.

Who needs to file Forms 1095-C with the state?

Along with the federal filing and furnishing requirements, some states have requirements as well.

California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont have Individual Mandates in place that require employers to report ACA data on the state level as well as federally. Learn more about these state requirements using our ACA State Requirements Guide.

What information is reported on Form 1095-C?

Form 1095-C is broken into 3 parts: Employee & Employer Information, Employee Offer of Coverage, and Covered Individuals.

Form 1095-C, Part I – Employee & Employer Information

This section includes basic information for the employee and employer, such as name, TIN, and address.

  • Box 1-6 – Employee name, SSN, and address
  • Box 7-13 – Employer name, SSN, and address
Form 1095-C - Part I, Employee & Employer Information
Image of Form 1095-C – Part I, Employee & Employer Information

Form 1095-C, Part II – Employee Offer of Coverage

This section breaks down the employee’s offer of coverage in great detail. The first two boxes in this section don’t have box numbers:

  • Employee’s Age on January 1 – This is only completed if the employer offered an ICHRA plan to the employee. This is completed with the employee’s age on January 1st of the tax year being filed.
  • Plan Start Month – This is used to indicate the month in which the employer plan year begins for the plan offered to the employee. This is required and should be completed using the two-digit number (01-12) that corresponds to the month. If there is no plan in which the employee was offered coverage, then 00 should be entered.

The remainder of Part II – Employee Offer of Coverage is made up of a grid with 4 rows, Lines 14-17, and has 12 columns indicating the months of the year. There is also an “All 12 months” column.

This should be completed using either the “All 12 Months” column or the “Jan” through “Dec” columns.

  • Line 14 – Offer of Coverage – This should be completed with the Series 1 Codes found on the IRS instructions and specifies the type of coverage, if any, that was offered to the employee and any applicable dependents.
  • Line 15 – Employee Required Contribution – The employee required contribution is the employee’s share of the monthly cost for the lowest-cost self-only plan that is offered to the employee. This may not be the same amount as the premium the employee pays each month; for example, if the employee enrolls in more expensive coverage.
    • This should only be completed where certain Series 1 Codes were entered in Line 14. If applicable, enter the employee required contribution into the corresponding boxes where the following codes were entered in Line 14: 1B, 1C, 1D, 1E, 1J, 1K, 1L, 1M, 1N, 1O, 1P, 1Q, 1T, or 1U.
  • Line 16 – Section 4980H Safe Harbor and Other Relief – This should be completed with the Code Series 2 codes if any apply. This is used to provide the IRS with more information regarding the employment/coverage status of the individual, if the employer met certain affordability safe harbors, or if the employer was eligible for the multi-employer interim relief for this employee.
  • Line 17 – ZIP Code – This should only be completed if specific codes were entered in line 14. If applicable, enter the ZIP code for the corresponding boxes where the following codes were entered in Line 14: 1L, 1M, 1N, 1O, 1P, 1Q, 1T, or 1U.
    • For codes 1L, 1M, 1N, or 1T, use the ZIP code of the employee’s residence.
    • For Codes 1O, 1P, 1Q, or 1U, use the ZIP code of the employee’s primary site of employment.
Form 1095-C - Part II, Employee Offer of Coverage
Image of Form 1095-C – Part II, Employee Offer of Coverage

Form 1095-C, Part III – Covered Individuals

This section provides more information regarding the covered individuals on self-insured coverage plans.

A covered individual is any person that is covered under the Responsible Individual’s plan. This includes the Responsible Individual, spouse, and any other dependents, if applicable.

First, there is a checkbox that should be checked if the employer offered self-insured coverage. If not, then this entire section can be left blank.

Next, there are 13 lines for covered individuals’ information. If there were more than 13 covered individuals, then additional copies of page 3 (Part III) may be used.

These lines include the name, SSN (or DOB for covered individuals other than the employee), and coverage information for each individual that was covered under the employer’s health plan (including the employee). This is split into the following columns:

  • (a) – Name of covered individual(s): first name, middle initial, last name
  • (b) – SSN or other TIN
  • (c) – DOB (if SSN or other TIN is not available)
  • (d) – Covered all 12 months*
  • (e) – Months of Coverage: Jan – Dec*
    *Please note: Either (d) or (e) should be completed for each covered individual.
Form 1095-C - Part III, Covered Individuals
Image of Form 1095-C – Part III, Covered Individuals

How are Forms 1095-A and 1095-B different from 1095-C?

These three form types are provided by different entities and to different groups of people.

Form 1095-A is generally provided by the Marketplace to those who are enrolled (or have dependents that are enrolled) in health coverage through the Marketplace. The Marketplace, which is short for the Health Insurance Marketplace, is a shopping and enrollment service for healthcare that was created by the Affordable Care Act in 2010. In most states, it is run by the federal government. Only those who are enrolled in Marketplace coverage should receive Form 1095-A, not Form 1095-B.

Form 1095-B is primarily provided by insurance companies and other coverage providers, such as small employers. Those who are enrolled in coverage outside of the Marketplace should receive this form, except for employees of ALEs that offer self-insured coverage.

Form 1095-C provides information to both the IRS and the employees regarding health coverage offered by an employer to each employee.

How are Forms 1095-A and 1095-B similar to 1095-C?

All forms provide individuals with information regarding health coverage during the prior year. They also provide the IRS with specific coverage information, such as if an individual was enrolled in coverage and for which months.

What are the deadlines for this form?

Traditionally, the filing deadlines for Forms 1094-C & 1095-C are as follows:

  • Submit a Paper Filing – February 28th
  • Furnish Recipient Copies – March 2nd
  • Submit an Electronic Filing – March 31st

If these deadlines fall on a weekend or legal holiday, then the due date is typically the following business day. Check out our annually updated deadlines article for the most up-to-date information.

Can I submit a paper filing?

Employers may choose to paper file their Form 1095-C filing to the IRS if their total form count is less than the 250-form threshold. E-filing is encouraged by the IRS, but if you have less than 250 forms to file, then paper filing is an option.

When filing on paper, you must send the forms to the IRS in a flat mailing envelope without staples or paperclips. These forms can be printed on regular paper in landscape format, and special forms do not need to be ordered.

If you have many forms, then you can send them in conveniently sized packages. Each package must be labeled with your name and should be numbered consecutively. The transmittal Form 1094-C should be placed in the first package along with Form 1095-C. Additional Forms 1095-C can be included in the other packages, if applicable. If you have any questions about completing the transmittal form, check out our Essential Guide: Mastering Form 1094-C.

Please note that postal regulations require that packages with official IRS forms must be sent via first-class mail.

Determining where to send your filing is dependent upon the filer’s address, specifically the state. Find your state in the graphic below for the correct IRS mailing address for your filing.

1095-c IRS addresses
IRS Addresses by State

Can I download Form 1095-C?

Yes, you can download a PDF version of this form from the IRS website. This copy can be completed virtually and printed out in landscape format with black ink to distribute to recipients and/or send to the IRS.

Can I submit an electronic filing?

Yes, of course! E-filing is encouraged by the IRS and offers many benefits. These benefits include immediate submission, quick turnaround time, status updates, and more.

E-filing can be a requirement for some filers. If filing more than 250 Forms 1095-C, then you must submit your filing electronically.

If choosing to submit your filing electronically, be sure to find an authorized ACA software provider to make e-filing quick and easy!

What are the penalties for not filing?

If you are required to file these information returns and fail to file or fail to furnish forms by the due date, then you may be subject to the following penalties:

  • Failure to file correct forms – $280 per form
  • Failure to furnish recipient forms – $280 per form
  • Failure to file electronically, when required to do so – $280 per form

Special rules apply that increase the per-return and per-statement and total penalties with no maximum limitations if there is intentional disregard of the requirement to file the returns and furnish recipient statements

2021 Instructions for Forms 1094-C and 1095-C

Check out the graphic below to see how quickly fines can accumulate based on a sample size of 250 forms the business should have filed.

Form 1095-C Penalties
IRS Potential Fine Amounts

How do I make a correction?

It is important that you take the time to review the information you are reporting on your Forms 1095-C for accuracy before distributing and filing. This will minimize the risk of common errors, which can result in your business incurring penalties and fines.

Even with careful reviewing, mistakes can happen! If your filing has errors, you can easily make corrections to your Forms 1095-C.

  • If you submitted your original filing electronically, then you should edit your filing accordingly with the original vendor.
  • If you submitted your original filing via mail, then you should complete a new form and include the updated information.
    • Once this has been completed, simply check the “Corrected” box at the top of the form. Always include a new transmittal Form 1094-C when mailing in corrections to the IRS.

Before you can consider your correction complete an updated copy of the form must be provided to the recipient as well. This ensures that all parties have updated information.

Conclusion

Once you have submitted these forms to the IRS, either electronically or via mail, and have received your “Accepted” status, then you have met all of the IRS requirements for these forms.

If you’re looking for a broken-down Understanding Form 1095-C guide in a downloadable format, make sure to download our PDF guide.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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