Forms 1094-C and 1095-C: What It Means for Employers

What it means in practice

What the two forms are. The Affordable Care Act added section 6056 to the Internal Revenue Code, which requires applicable large employers to file information returns about whether they offered health coverage to their full-time employees and dependents and, if so, what was offered. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is the per-employee return; Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, is the cover form that summarizes the employer. The IRS likens the pair to Form W-2 filed for each employee with Form W-3 as the transmittal.

Why the IRS wants them. The instructions say the forms are used to determine whether an ALE Member owes an employer shared responsibility payment under section 4980H and whether employees are eligible for the premium tax credit. Those payment rules are covered on the ACA (Affordable Care Act) page.

Who must file. An ALE Member must file one or more Forms 1094-C and a Form 1095-C for each employee who was a full-time employee for any month of the calendar year. An applicable large employer is generally an employer with 50 or more full-time employees, including full-time equivalent employees, in the previous year. Employers under common control under Code section 414(b), (c), (m) or (o) are combined to test ALE status (an Aggregated ALE Group), but each member reports separately under its own EIN, even a member with fewer than 50 full-time employees of its own (section 6056 Q&A 5). Section 6056 also applies to nonprofit and government employers (Q&A 6). "Full-time employee" means the section 4980H definition, not a company's own benefits definition.

Who does not file or receive one. An employer that is not an ALE Member does not file Forms 1094-C or 1095-C (Q&A 9). The IRS 1094-C/1095-C Q&A 6 says a 1095-C is not required for an employee who was not full-time in any month, or who was in a limited non-assessment period (such as a new variable hour employee's initial measurement period) for all 12 months, unless the employee or a family member enrolled in the employer's self-insured plan. A full-time employee covered by TRICARE or a VA health program still gets a 1095-C, even though such employees are not counted when testing ALE status (Q&A 7).

Form 1094-C, Part I. Lines 1 to 8 identify the ALE Member: name, EIN (without a valid EIN the form is not processed), address and an IRS contact. Lines 9 to 16 are only for a Designated Governmental Entity (DGE) filing for a government ALE Member. Line 18 counts the Forms 1095-C attached, and line 19 marks the Authoritative Transmittal.

Form 1094-C, Parts II to IV. These parts are completed only on the Authoritative Transmittal. Line 20 is the total number of Forms 1095-C filed for the ALE Member, line 21 asks whether it was in an Aggregated ALE Group, and line 22 holds certifications: box A for the Qualifying Offer Method and box D for the 98% Offer Method (B and C are reserved). Part III reports, by month, (a) whether minimum essential coverage was offered to at least 95% of full-time employees and their dependents, (b) the section 4980H full-time employee count, (c) the total employee count, measured on one chosen day each month, and (d) the aggregated group indicator. Part IV lists the names and EINs of up to 30 other members of the Aggregated ALE Group.

The Authoritative Transmittal. An ALE Member may split its Forms 1095-C across several Forms 1094-C, for example one per division, but exactly one of them must be marked on line 19 and must carry the aggregate data for the whole ALE Member; the others report only their line 18 count. No Authoritative Transmittal is filed for an Aggregated ALE Group as a whole. 26 CFR 301.6056-1(c)(2) states the same rule and requires a single 1095-C per full-time employee for that ALE Member.

Form 1095-C, Part I. Lines 1 to 6 identify the employee, including the Social Security number; lines 7 to 13 identify the ALE Member, matching the Form 1094-C.

Form 1095-C, Part II and line 14. Part II opens with the employee's age (for individual coverage HRA offers only) and a Plan Start Month box that the 2025 instructions say may not be blank. Line 14 takes a Code Series 1 code for every month and is never left blank. The codes describe what was offered: 1A is a Qualifying Offer; 1B is minimum value coverage for the employee only; 1C adds dependents; 1D adds a spouse; 1E covers employee, spouse and dependents; 1F is coverage that does not provide minimum value; 1G is for a non-full-time employee or non-employee enrolled in self-insured coverage; 1H means no offer; 1J and 1K are conditional spousal offers; and 1L through 1U are individual coverage HRA offers. An offer counts for a month only if it covers every day of it.

Lines 15, 16 and 17. Line 15 is the Employee Required Contribution, generally the employee share of the monthly cost of the lowest-cost self-only minimum value coverage offered. It is entered as "0.00" if the cost is zero and may differ from what the employee pays, for example when the employee chose family coverage. Line 16 takes at most one Code Series 2 code per month, or stays blank if none applies: 2A not employed that month, 2B not a full-time employee (or offer ended mid-month only because employment ended), 2C enrolled for each day of the month, 2D in a section 4980H(b) limited non-assessment period, 2E multiemployer interim rule relief, and 2F, 2G and 2H for the Form W-2, federal poverty line and rate of pay affordability safe harbors. Line 17 is a ZIP code used only for individual coverage HRA offers.

Part III and self-insured plans. Part III lists covered individuals and is completed only when the ALE Member sponsors self-insured coverage, including an individual coverage HRA, in which the person enrolled. It shows each covered person's name, SSN or other TIN (or date of birth) and months of coverage; at least 1 day of coverage counts for the month. A self-insured ALE Member completes Parts I, II and III for any employee who enrolls, full-time or not. An ALE Member offering only insured coverage leaves Part III blank, because the insurer reports that coverage. Part III carries the section 6055 reporting (section 6056 Q&A 1).

Relationship to Forms 1094-B and 1095-B. Form 1095-B reports minimum essential coverage. The Instructions for Forms 1094-B and 1095-B (2025) say insurers file it for most insured coverage, including insured employer plans, and a non-ALE employer with a self-insured plan uses the B forms instead of the C forms. A self-insured ALE Member may also use Forms 1094-B and 1095-B for non-employees who enroll, such as a non-employee director or a retiree retired all year. Form 1095-A comes from the Marketplace. An employee of an insured ALE may receive a 1095-C from the employer and a 1095-B from the insurer.

Alternative reporting methods. 26 CFR 301.6056-1(j) offers two optional simplified methods. Under the Qualifying Offer Method, an employer that offered minimum value coverage costing the employee no more than 9.5% (as adjusted) of the mainland single federal poverty line, plus spouse and dependent coverage, may enter code 1A and leave line 15 blank. Under the 98% Offer Method (see Example 3), the employer need not complete the full-time count in Part III, column (b).

The electronic filing threshold. Under 26 CFR 301.6011-2, for returns required to be filed in calendar years after 2023, a filer must file electronically if it must file at least 10 information returns during the year, counted in the aggregate. The 2025 instructions note that an employer with fewer than 10 ACA forms can still have to e-file because of other returns, such as Forms W-2 and Form 1099. ACA returns go through the IRS AIR system; a hardship waiver is requested on Form 8508.

Corrections. A corrected Authoritative Transmittal is a standalone, complete Form 1094-C marked CORRECTED with nothing attached. A corrected 1095-C is filed complete and marked CORRECTED with a non-corrected 1094-C, and a copy generally goes to the employee. A de minimis safe harbor generally covers line 15 dollar errors of no more than $100 (Notice 2017-9). Under 26 CFR 301.6056-1(i)(2), a return made wrong by a later change in circumstances, such as a retroactive change in coverage, is treated as an uncorrected failure if not corrected.

Penalties and responsibility. For 2025 tax year returns, the 2025 instructions list $340 for each failure to file a correct information return (section 6721) and $340 for each failure to furnish a correct statement (section 6722), each capped at $4,098,500 per calendar year, higher for intentional disregard, with waiver possible for reasonable cause (section 6724). Failing to e-file when required can also cost $340 per return. IRS section 6056 Q&A 29 says an ALE Member may hire a third party to file and furnish, but that does not transfer its liability for accurate returns or under section 4980H.

Recordkeeping. The instructions say to keep copies of filed returns, or the ability to reconstruct the data, for at least 3 years from the due date. Furnishing electronically requires the employee's affirmative consent specific to the 1095-C (26 CFR 301.6056-2).

Worked example 1: an insured plan. An insured ALE Member offers a full-time employee minimum value coverage for herself, spouse and children all year, at $95.00 a month for self-only coverage, and she enrolls. Her 1095-C shows 1E on line 14 and 95.00 on line 15 in the All 12 Months box, and 2C on line 16. Part III stays blank because the insurer reports her coverage.

Worked example 2: a mid-month hire. Based on IRS Q&A 12, an employee starts on the 10th of a month and coverage, if elected, would also start on the 10th. Because the offer did not cover every day of the month, line 14 shows 1H for that month, and line 16 shows 2D because the first partial month is a limited non-assessment period.

Worked example 3: the 98% test. In the instructions' example, an employer with 325 employees sets aside 25 scheduled for 10 hours a week who cannot be full-time and files 1095-Cs for the other 300. It offered affordable minimum value coverage to 295 of them: 295 / 300 = 98.3%, which meets the 98% threshold, so it may check box D. It still files for all 300, including the 5 not offered coverage, in case any was full-time for a month.

Where states differ. Some states collect these forms for their own coverage mandates (examples, not a complete list). The California Franchise Tax Board says minimum essential coverage providers file the federal 1094 and 1095 forms with FTB and may assess $50 per covered individual after its extended due date (checked November 2026). New Jersey's Division of Taxation says a 1095-C with only Parts I and II completed does not meet its requirements.

Q: Does an ALE that offers no coverage still file? Yes. The IRS says ALE Members must file and furnish for every full-time employee whether coverage was offered to all, some or none, reporting code 1H where none was offered (section 6056 Q&A 11).

Q: Can an employee get more than one 1095-C? Yes. The recipient instructions on the form say an employee who worked for more than one ALE during the year may receive one from each. Within an Aggregated ALE Group, a month split between members is generally reported by the member with the most hours of service.

This entry describes what Forms 1094-C and 1095-C are and how IRS sources describe them. It does not determine ALE status, codes or filing obligations for any particular employer.

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