Skip to main content

Automate your Accounts Payables and Vendor Management with Zenwork Payments Start 30-Day Free Trial

Table of Contents

What Is Form 1095-C?

IRS Form 1095-C is one of the Affordable Care Act Forms offered by Tax1099. The form is for reporting information to the IRS and to taxpayers about individuals not covered by minimum essential healthcare coverage.

The health care law defines that employers must offer health insurance to their workers. The law refers to them as “applicable large employers,” or ALEs. Any employee of an ALE who is offered insurance coverage should receive a 1095-C. Employees that decline a health plan will still receive a 1095-C.

The form includes:

  • The employee and employer.
  • The months the employee was eligible for health coverage with the cost of the cheapest monthly premium the employee could have paid.
  • If the ALE does not offer its employees insurance. If it doesn’t, the ALE will be given a financial penalty.

Who Should File 1095-C?

Employers with 50 or more full-time employees in the previous year use forms 1094-C and 1095-C to report information required in sections 6055 and 6056 about offers of health coverage.

An ALE Member must file one or more 1094-C forms (including a 1094-C designated as the Authoritative Transmittal, whether or not filing multiple Forms 1094-C), and must file a 1095-C for each employee who was a full-time employee for any month of the year.

Generally, the ALE Member is required to furnish a copy of Form 1095-C (or a substitute form) to the employee.

What Goes on 1095-C Form: Part by Part Explained

Part I- Employee & ALE Information

Part I of 1095-C reports basic information about your employee and company.

Lines 1 – 6: For Employee

This section reports information about the employee including name, address, and social security number (SSN)

Lines 7 – 13: For Applicable Large Employer (ALE)

Lines 7 to 13 reports information about your business including the name, address, and EIN.

Part II- Offer of Coverage (With Codes)

Line 14

This line reports the type of coverage provided to your employees using applicable codes, as given by the IRS. If an employee was not offered coverage for a month, you can use code 1H.

Line 15

Line 15 is needed only if you used code 1B, 1C, 1D, 1E, 1J, 1K, 1L, 1M, 1N, 1O, 1P, 1Q, 1T, or 1U on the previous line. This line requires you to report the monthly cost of the minimum essential coverage as per ACA rules.

Line 16

This line reports why you might not owe a penalty for a particular month, using a new set of codes (Code Series 2)

Part III- Covered Individuals

Part III of 1095-C is applicable only if your business provides self-insured coverage to employees. In this section, list down all the employee name, SSN (or TIN for covered individuals other than the employee listed in Part I), and coverage information suc as months covered.

Note: Using the wrong code in Line 14 is the #1 trigger for IRS Letter 226J penalty notices.

Form 1095-C Deadlines For 2025

The following are the due dates for each filing type. Forms must be transmitted to the IRS before the deadline.

  • Recipient copy > March 4
  • IRS eFile > March 31
  • IRS paper filing > February 28

If a due date falls on a weekend or holiday, it will be due the next business day.

How to Fix Common Mistakes When Filing 1095-C

Wrong full-time employee count

The IRS uses two methods to determine if an employee is a full-time employee: monthly measurement method or the look-back measurement method. Use either method to calculate whether or not the employee completed130 hours of service in a calendar month or at least 30 hours of service per week.

Missing or Incorrect Social Security Numbers (SSNs)

You must request SSNs from your employees via Form W-9 prior to filing, ideally during the onboarding process. If the SSN still remains unavailable, you can use the employee’s date of birth and document the attempts you made to collect the SSN.

Zeros in blank boxes

If there is no code on Lines 14 and 16, or no coverage was reported on Line 15, then those specific lines should be left blank rather than entering zeros. Using zeros can lead to processing errors when you submit it to the IRS.

Recordkeeping & Audit Readiness Tips For Staying Compliant

Tip 1: Keep documentation that supports your 1095-C filing, including payroll records, plan documents, affordability worksheets, and mailing proofs.

Tip 2: Save all the acknowledgments and error logs when e-filing the 1095-C form. This is essential in case of audits from the IRS.

Tip 3: Always maintain written policies on how you measure employee working hours and eligibility.

Tip 4: Do periodic internal audits to cut down the risk of IRS audits, penalties, and state individual-mandate notices.

How to eFile 1095-C for the Tax Year 2025?

Tax1099 is the go-to source for your tax information reporting with IRS.

You can eFile Form 1095-C Online for the year 2025 using Tax1099.

Don’t wait for the deadline eFile Now.!

Real-Life Scenarios: Explaining common 1095-C reporting scenarios

  • If an ALE with 55 full-time employees offers health insurance that is affordable, they must report it on 1095-C by using code 1A in Line 14 to show affordable coverage was offered to nearly all employees.
  • If an ALE with 80 employees doesn’t offer coverage to 8 full-time employees for two months, the company will report it using code 1H on Line 14 and code 2A for the months it wasn’t provided. Also, since the coverage was not provided for multiple employees, the ALE may owe a penalty for those months.
  • If an ALE offers a self-insured plan that also covers their part-time interns, it must be reported on 1095-C even if they are not full-time employees. They are considered full-time equivalent employees and are listed individually in Part III of Form 1095-C.
  • If an employer mails 500 Form 1095-Cs on February 15 and ten are returned as undeliverable, the employer should re-mail or provides the forms by secure electronic delivery within 30 days.
  • If an employee who was recently terminated is offered COBRA but declines it, the employer must report it using code 1H on Line 14 and code 2A on Line 16.
  • If an employee was hired on July 1st but had to wait till September 1st for health coverage to begin, it is still reported on 1095-C. The employer reports code 1H in Line 14 for non-coverage months, code 2D on Line 16 for the waiting period, and once the coverage begins, use regular reporting codes.

FAQs

1. Does every worker get a 1095-C form?

No, only full-time employees (those who work 30+ hours per week or 130+ hours per month) and employees under a self-insured plan receive1095-C.

2. Are seasonal employees counted in the 50-employee test?

Yes, seasonal employees are counted when calculating the ALE employee threshold of 50 or more FTE.

3. Can SSNs be truncated on Form 1095-C employee copies?

Yes, SSNs can be truncated on 1095-C employee copies to show only the last four digits (e.g., XXX-XX-1234).

4. How are mid-year hires reported on 1095-C?

If you hire an employee in the middle of the year, report their health coverage using waiting-period codes until coverage begins, and then switch to the actual offer code only once coverage starts.

5. What if an employee refuses to provide an SSN for dependents?

If an employee refuses to provide SSN for dependants even after requesting for three times, use their date of birth. Also, make sure to document each attempt.

6. Are 1095 penalties capped?

Yes, penalties for missing 1095-C filing are capped at $3.99 million per ALE for 2025TY.

7. How long should records be kept?

ALE must keep records for at least four years after successfully filing 1095-C forms in case of audit or review.

Line codes, coverage offers, deadlines — ACA reporting is a lot.

Let Tax1099 take care of the details.

Sign up now