Who Must File Form 1095-C: A Simple Guide for Employers

As an employer in the U.S., you understand the importance of filing the Form 1095-C accurately because the Affordable Care Act reporting requirements aren’t that simple. A single mistake or missing the deadline can weigh heavily.

To provide brief information on the Form 1095-C, it is titled as Employer-Provided Health Insurance Offer and Coverage. It is an individual form for every employee provided by an ALE, and it details the type of health insurance and the coverage provided to the employee and their dependents during the calendar year.

Not every employer is required to file the Form 1095-C. Now, the main question is who must file 1095-C? This detailed guide is here to break down all the details regarding Form 1095-C.

Does the payer need 1095-C?

If you want to understand who needs to file 1095-C, remember the ALE 50-employee rule. Under the Affordable Care Act, you are an Applicable Large Employer (ALE) if your business averaged 50 or more full-time employees plus full-time equivalents (FTEs) during the prior calendar year.

This count also includes FTEs, meaning the part-time hours converted into FTEs. Each month, add up the part-time hours for all non-full-time employees (cap each worker at 120 hours per month) and divide by 120 to determine that month’s FTEs, then average across all 12 months.

ALE status is determined by adding the total number of full-time employees and the total number of FTEs.

You are an ALE if the total FTE is 50 or 50+

If you are an ALE, then you must file Form 1095-C for every employee who worked as a full-time employee for at least one month during the calendar year. Also, remember to send a copy of Form 1095-C to each of those employees for their own records and tax reporting.

Your group has a total FTE of 50+

If you own or are a part of multiple related companies, like a parent company with subsidiaries, then you must combine the employee counts across all entities to see if you hit the 50+ threshold. If your group is considered an ALE, then each company or subsidiary must file its own Form 1095-C separately under its own EIN.

Your business has a total FTE of less than 50

What if you are not an ALE? Then, you don’t need to fill the Form 1095-C, but if you do offer a self-insured health plan, then you need to file Form 1094-B/1095-B.

To make the process less overwhelming, decide your ALE status in the first week of January itself using last year’s count, so that at least your filing plan is clear.

What exactly gets filed and furnished?

Now, let’s understand what exactly needs to be filed and furnished. The ALEs need to file the Form 1094-C, which is a summary form that needs to be filed with the IRS. It transmits the Forms 1095-C submitted for each employee and summarizes the overall data on the employer’s health coverage offerings.

Only one submission is required and is marked as the main/summary filing. Then, ALEs need to file the Form 1095-C one per full-time employee. Also, you need to provide a copy of the Form 1095-C to the respective employee.

Things to keep in mind while filing the form:

• The coverage type matters when filling the Part III. If you provide self-insured plans (employer directly funds the health plans), then fill Part III to list covered people (employee and family). If you provide fully insured plans (you have bought coverage from an insurance company), then skip Part III. The insurance carrier sends 1095-B for coverage.
• For COBRA participants and retirees: if coverage is fully insured, the insurance carrier issues Form 1095-B. If self-insured, the employer must issue Form 1095-C with Part III completed.

Dates, e-file rule, and extensions (every year)

When it comes to filing Form 1094-C and Form 1095-C, deadlines play an important role. So, here are some important dates that should be remembered while filing the forms:

• Employers must furnish Form 1095-C to employees by Monday, March 2, 2026 (since February 28 is a Saturday and March 1 is a Sunday). This deadline cannot be extended.
• Employers should file the Forms 1094-C and 1095-C with the IRS by March 2, 2026 (if filing on paper) or 31st March (if filing electronically). .
• If the payer files 10 or more total information returns for the year (across all types, e.g., 1095-C, 1094-C, W-2, 1099, 1042-S, etc.), then e-filing is required.

If you need more time, a 30-day extension for IRS filing only can be requested by submitting Form 8809 by the original due date. This extension does not apply to furnishing employee copies

Also, late or incorrect filing and furnishing have separate penalties. The penalties are subject to adjustment for inflation every year. In 2025, failure to file Form 1095-C may result in a penalty of $330 per form for TY 2024 returns, but this amount and the annual cap will be adjusted for inflation. The maximum annual penalty for large employers for TY 2024 was about $3.5M, with a lower cap for small employers. Penalties double to $660 per form for intentional disregard, with no cap

Hence, it is best to keep proof of mailing/e-delivery and IRS acceptance to avoid such instances.

Counting staff without the math headache

You can use this formula to determine whether your business is required to fill out the Form 1095-C :

FTE Total: Number of Full-time employees + (Total Part-time Hours/120)

Why 120? Because the IRS defines FTEs as 120 hours of work per month = 1 full-time equivalent.

Let’s understand this with a quick example:

If your business has 40 full-time employees, meaning they work 120+ hours/month, then they are counted as 1 full-time equivalent. And if they are 20 part-time workers who work 80 hours/month each, then the FTE for them would be equivalent to 13.3 FTEs (20×80 = 1,600 hours and 1,600/120 = 13.3). Now, the total FTE would be 40 + 13.3 = 53.3. The IRS requires you to round down, so it becomes 53.

If you want to determine the full-time status, then there are two methods:

• Monthly method (look at each month)In this method, you need to determine whether the employee is a full-time employee by checking on a month-to-month basis, whether he/she has completed at least 130 hours of service monthly. For the 1094-C monthly counts, pick a consistent counting day, like the first of the month or the first/last day of a payroll period.
• Look-back method for variable-hour teams
  Under this method, you can determine the status of an employee as a full-time employee by calculating the hours of service worked in the preceding period, which is referred to as the measurement period. Note: this method should not be used to determine FL status for ALE determination purposes.

Note, if an employee was FT for any month, a 1095-C is required for that year.

Special cases that require special handling

In some cases, the regular norms for filing Form 1095-C cannot be followed. These cases need to be tackled carefully, like:

• Union/multiemployer plans:Some union employees receive coverage through a multi-employer plan. So, you need to treat these employees as if they were offered coverage and use the standard IRS lines of code on Form 1095-C.
• COBRA or retirees:If an individual is no longer employed at some point during the year, the form you must file depends on the type of plan and their employment status. For fully insured plans, the insurance carrier will issue Form 1095-B. For self-insured plans, the employer must file Form 1095-C and complete Part III to report coverage if the individual was an employee at any time during the year, even for just one month. If the person was never an employee during that year—for example, a retiree all year long—then the employer may instead use Form 1095-B.
• ICHRA:: If you offer an Individual Coverage Health Reimbursement Arrangement, then it should be reported on Form 1095-C. The affordability of the ICHRA determines which lines of code apply.
• Not an ALE but self-insured: If you are not an ALE, but provide self-insured coverage to employees, then file the Form 1094-B/1095-B to report the coverage and dependents.

Mistakes to avoid while filing the Form 1095-C

Mistakes are bound to happen, but not when you are filing the Form 1095-C because the penalties can be really heavy, even due to minor errors. Here are some common mistakes that employers make, and you should avoid at all costs:

• It is important to understand that as an employer, you need to file the Form 1095-C for every employee who served in the company for at least one month and furnish them a copy. Not including the employees with a short-term employment period can expose you to significant IRS penalties.
• Another common mistake that businesses make is that they treat multiple related companies as one filer. But that’s not the case. The subsidiaries need to be combined only to determine whether Form 1095-C needs to be filed or not. If yes, then every subsidiary needs to fill out the Form 1095-C for their employees individually under their own EIN.
• Filling Part III for fully insured coverage is another common mistake. The Part III section on the Form 1095-C applies only to the employers providing self-insured coverage or level-funded plans.
• The Form 1094-C serves as a transmittal form that summarizes all the individual 1095-C forms filed by the employer. The IRS requires that one version as the authoritative transmittal, which functions as the main summary for the business. Without this, the IRS cannot complete the submission process correctly, leading to filing errors and compliance issues.
• The IRS requires employers to file 10 or more information returns in a calendar year to submit them electronically. This threshold applies in total, including the other information returns, and not just Form 1095-C filings.

A quick checklist for last-minute preparations

If you have made some errors, then don’t panic. Just file the corrected forms and re-furnish as needed. For employers, here is a pre-file checklist:

• FT roster: Ensure that you have the list of all the employees who are full-time employees or were full-time employees for at least one month.
• Coverage type: Check what type of coverage you provide. If you provide self-insured plans, then you need to fill Part III of the Form 1095-C, and if you provide full-insured coverage, then skip Part III.
• Deadline: Mark your calendar to file the Form 1095-C by 27th/28th Feb (for paper filing) and 31st March (for e-filing). Furnish the copies to employees by 3rd March.
• Line codes: Review and verify the Series 1 and 2 used on each employee’s Form 1095-C. The codes should accurately describe the type of coverage offered, affordability, and employee eligibility.
• 1094-C counts: Ensure that the total reported on 1094-C matches with internal records.
• e-file readiness: If you are filing for 10 or more informational returns, then confirm whether you are set up for electronic filing with the IRS AIR (Affordable Care Act Information Returns) system.

State add-ons (only where required)

In addition to the federal ACA reporting requirements (Forms 1094-C and 1095-C), certain US states have their own mandate laws. This means that you not only need to file the ACA forms with the IRS, but also with the state’s revenue or insurance department.

For instance, the states, like California, Massachusetts, New Jersey, Rhode Island, and the District of Columbia, require ACA data for residents, mostly through e-filing. However, Massachusetts has a separate form (MA 1099-HC) that needs to be filed for state filing, along with Form 1094-C and Form 1095-C filing for IRS.

FAQs

Is a 1095-C required if no offer was made?

Yes, even if, as an ALE, you didn’t offer any health insurance coverage, you need to file the 1094-C/1095-C. The employer can use the appropriate line codes for Series 1 and 2 on the form to show that no coverage is offered.

Who receives 1095-C?

Only full-time employees (FT for any month) must receive one. Part-time employees only appear if the ALE is self-insured and they are enrolled.

Is e-filing mandatory?

Yes, if you are filing 10 or more information returns, including 1095-C, for the year, then e-filing becomes important.

What are the main deadlines?

File the form 1094-C and 1095-C by 27th/28th February if filing on paper and 31st March if e-filing. Send the copies to employees by 3rd March.

Do related companies file together?

No. Each ALE Member files under its own EIN and submits one main/summary 1094-C.

Filing the 1094-C and 1095-C is simple if you have the right platform with you. Consider Tax1099 to simplify your filings, and that too error-free and within the deadlines.