Form 1095-C is the IRS form an employer with 50 or more full-time employees uses to report the health coverage it offered each full-time employee, month by month. Employees use it as a record; the IRS uses it to decide whether the employer owes an ACA penalty and whether an employee can get a marketplace tax credit.
Key takeaways
- Who sends it: applicable large employers (50 or more full-time employees, including full-time equivalents, in the prior year) send a 1095-C to every employee who was full-time for at least one month.
- Employees do not attach it to a tax return. Keep it with your tax records. It matters most if you or a family member bought marketplace coverage.
- Employers file it with the IRS along with Form 1094-C. For 2025 coverage, statements were due March 2, 2026, and electronic filing was due March 31, 2026.
- The codes carry the risk. Lines 14 and 16 tell the IRS whether you made a qualifying offer. Wrong codes are the most common reason employers receive penalty letters they do not owe.
What Form 1095-C is
Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, exists because of the Affordable Care Act employer mandate. The mandate requires an applicable large employer (ALE) to offer affordable, minimum-value coverage to at least 95% of its full-time employees and their dependents, or risk a penalty under Internal Revenue Code Section 4980H.
The IRS cannot enforce that rule without data, so each ALE reports, for each full-time employee and each month: whether coverage was offered, to whom (employee, spouse, dependents), what the employee would have paid for the lowest-cost self-only option, and why the employer believes no penalty applies. That report is the 1095-C. The cover sheet that goes with all of them is Form 1094-C, which reports the employer-level totals.
Who gets a 1095-C
- Full-time employees of an ALE. Anyone who averaged 30 or more hours a week (130 hours a month) in at least one month of the year gets a form, whether or not they enrolled.
- Enrolled non-full-time employees, if the plan is self-insured. A self-insured ALE also completes Part III for anyone covered by the plan, including part-time employees, retirees and COBRA participants.
- Not employees of small employers. An employer below 50 full-time employees does not file 1095-C. If its plan is self-insured, it reports coverage on Form 1095-B instead; if it is fully insured, the carrier handles that reporting.
| Form | Who sends it | What it shows |
|---|---|---|
| 1095-A | The health insurance marketplace | Marketplace coverage and advance premium tax credits. Needed to file Form 8962. |
| 1095-B | Insurance carriers, and self-insured employers under 50 | Who was covered, month by month. |
| 1095-C | Applicable large employers (50 or more) | What coverage was offered, what it cost the employee and, for self-insured plans, who was covered. |
What each part of the form means
Part I: employee and employer
Names, addresses and taxpayer identification numbers, plus a contact phone number for the employer. If the employer is part of a controlled group, each member files under its own EIN.
Part II: the offer (Lines 14 to 17)
Line 14 is the offer code for each month. Line 15 is the employee share of the lowest-cost, self-only, minimum-value plan offered, not what the employee actually paid for the tier they chose. Line 16 explains why no penalty should apply for that month. Line 17 is a ZIP code used only when the offer was an individual coverage HRA (ICHRA).
| Common code | Meaning |
|---|---|
| 1A | Qualifying offer: minimum-value coverage to employee, spouse and dependents, with the employee cost at or below the federal poverty line safe harbor. |
| 1B | Minimum-value coverage offered to the employee only. |
| 1C | Offered to the employee and dependents, not a spouse. |
| 1D | Offered to the employee and spouse, not dependents. |
| 1E | Offered to the employee, spouse and dependents. |
| 1H | No offer of coverage, or coverage that was not minimum value. |
| 2A | Not employed during the month. |
| 2B | Not a full-time employee during the month. |
| 2C | Employee enrolled in the coverage offered. |
| 2D | Limited non-assessment period, such as a new hire waiting period. |
| 2F, 2G, 2H | Affordability safe harbor used: W-2 wages, federal poverty line, or rate of pay. |
Part III: covered individuals
Completed only by self-insured employers. It lists each covered person and the months they were covered. Fully insured employers leave it blank because the carrier reports coverage separately.
What employees should do with it
Nothing needs to be attached to your return. The form confirms what your employer offered, which matters in one situation above all: if you or a family member enrolled in marketplace coverage with a premium tax credit. A person who was offered affordable, minimum-value coverage through work generally is not eligible for that credit, and the IRS can compare the 1095-C against Form 8962.
Do not be surprised if a form never arrives in the mail. Since 2025, employers can post a clear notice on a website that the form is available on request instead of mailing it. The notice must be up by the furnishing deadline and stay up through October 15, and the employer must send a copy within 30 days of a request.
Employer deadlines and filing rules
| Requirement | For 2025 coverage |
|---|---|
| Furnish to employees (or post the notice) | March 2, 2026 |
| Paper filing with the IRS | March 2, 2026 |
| Electronic filing with the IRS | March 31, 2026 |
| Notice must remain posted through | October 15, 2026 |
For 2026 coverage, reported in early 2027, expect the same pattern: employee statements or the notice around the start of March and electronic filing by March 31. An employer filing 10 or more information returns of any type in a year, counting W-2s and 1099s together, must file electronically, which in practice means nearly every ALE.
Penalties for getting it wrong
There are two separate kinds of exposure, and they are often confused.
- Reporting penalties. For returns filed in 2026, failing to file a correct 1095-C with the IRS can cost up to $340 per return, and failing to furnish a correct statement to an employee up to another $340 per statement, with an annual cap of more than $4 million for each.
- Employer mandate penalties. The 4980H penalties are driven by what the forms say. For 2026 the “A” penalty (not offering coverage to at least 95% of full-time employees) is $3,340 per full-time employee, minus the first 30, and the “B” penalty (coverage offered but unaffordable or not minimum value) is $5,010 for each full-time employee who receives a premium tax credit.
The IRS proposes 4980H penalties in Letter 226-J. Employers now have 90 days to respond, and the IRS has six years from the return due date to assess. Many 226-J letters trace back to a single wrong code, such as a 1H where a 1E and 2C belonged. Our guide to late ACA and Form 5500 filings covers what to do if a deadline was missed.
The mistakes we see most often
- Reporting on Line 15 what the employee paid for family coverage instead of the lowest-cost self-only option.
- Leaving Line 16 blank when an affordability safe harbor applies. Check your numbers with our ACA affordability calculator; the threshold is 9.96% for 2026 and 10.22% for 2027.
- Coding new hires in their waiting period as 1H without 2D.
- Treating variable-hour employees as part-time without a documented measurement method.
- Missing Part III for COBRA participants and retirees on a self-insured plan.
- Filing under the wrong EIN in a controlled group.
For the full reporting process, see our ACA reporting (Forms 1094-C and 1095-C) page and our overview of ACA employer penalties.
More plain-English benefits explainers
- What Is an HSA?: health savings accounts, limits and employer rules
- What Is an HMO?: how HMO plans work and who they fit
- What Does EE Mean?: EE, ES, EC and family coverage tiers
- What Is Form 1094-C?: the employer transmittal and the 95% offer test
- What Is an ASO Health Plan?: how administrative services only, self-funded plans work
- How Much Does COBRA Insurance Cost?: averages, deadlines and cheaper options
- What Is a PBM?: how pharmacy benefit managers make money
- What Is EBSA?: the Department of Labor agency that enforces ERISA
- What Is a Broker of Record Letter?: how to change brokers without changing your plan
- Offering Group Health Insurance With No Employer Contribution: a guide for businesses with 2-50 employees
- What Is an Applicable Large Employer?: the 50-employee test and what it triggers
Frequently asked questions
Do I need Form 1095-C to file my taxes?
No. You do not attach it to your return and you can file without it. Keep it with your records. If you bought marketplace coverage, the form you need to file is Form 1095-A.
Why did I not receive a 1095-C?
Either your employer has fewer than 50 full-time employees, you were not full-time in any month, or your employer posted a notice that the form is available on request instead of mailing it. Ask HR for a copy; they must send it within 30 days of your request.
What is the difference between Form 1095-B and 1095-C?
Form 1095-B shows who was covered and is sent by carriers and by self-insured employers under 50. Form 1095-C is sent by employers with 50 or more full-time employees and shows what coverage was offered and what it would cost the employee.
When is Form 1095-C due?
For 2025 coverage, employee statements and paper filings were due March 2, 2026, and electronic filings were due March 31, 2026. Coverage for 2026 follows the same pattern in early 2027.
What is the penalty for not filing Form 1095-C?
For returns filed in 2026, up to $340 per return not filed correctly with the IRS and up to $340 per statement not furnished correctly to an employee, in addition to any employer mandate penalty the forms trigger.
Get your 1095-C reporting checked
CFH Insurance Consultants is an independent employee benefits firm. We are licensed insurance brokers, and for proper coverage of an account we work in teams of five. Send us last year’s 1094-C and a sample of your 1095-Cs and we will check the codes against how your plan and eligibility rules actually work, before a 226-J letter does it for you. Start here, call 248.370.8853, or book a 30-minute call.
This article is general information, not tax or legal advice. Penalty amounts and deadlines are adjusted by the IRS each year; confirm current figures in the IRS instructions for Forms 1094-C and 1095-C.
