Form 1094-C is the transmittal, or cover sheet, that an applicable large employer files with the IRS along with its Forms 1095-C. The 1095-Cs describe each employee. The 1094-C describes the employer: how many people it employed, whether it offered coverage to at least 95% of its full-time employees each month, and whether it belongs to a controlled group. Those employer-level answers are what the IRS uses to decide whether an ACA penalty applies.
Key takeaways
- Only the IRS gets it. Employees receive a 1095-C; the 1094-C goes to the IRS only.
- One authoritative transmittal per employer. You may send the 1095-Cs in several batches, but only one 1094-C per EIN can carry the employer-level totals.
- Part III carries the penalty risk. A “No” in the 95% offer column for any month exposes the employer to the largest ACA penalty, figured on nearly its whole full-time workforce.
- Same deadlines as the 1095-C. For 2025 coverage: paper by March 2, 2026, or electronically by March 31, 2026.
What Form 1094-C does
Under the Affordable Care Act employer mandate, an applicable large employer (ALE), meaning one with 50 or more full-time employees, including full-time equivalents, in the prior year, must report the health coverage it offered. That reporting has two layers.
| Form 1094-C | Form 1095-C | |
|---|---|---|
| What it is | Transmittal (cover sheet) | Employee statement |
| Describes | The employer | One employee |
| Goes to | IRS only | IRS and the employee |
| How many | One authoritative transmittal per EIN | One per full-time employee (plus covered individuals on self-insured plans) |
| Drives | The “A” penalty: offering coverage to at least 95% of full-time employees | The “B” penalty: affordability and minimum value for each person |
For what each line of the employee form means, see what Form 1095-C is. For how the whole reporting process runs, see ACA reporting (Forms 1094-C and 1095-C).
Part I: who is filing
- Lines 1 to 8: the employer’s name, EIN, address and an IRS contact person. The address should match the one shown on the 1095-Cs.
- Lines 9 to 16: completed only if a designated government entity files on the employer’s behalf. Most private employers leave these blank.
- Line 18: the number of 1095-Cs sent with this particular transmittal.
- Line 19: check this box on the authoritative transmittal, the one 1094-C that reports the employer-level totals. Any other 1094-C you file for the same EIN is signed but otherwise left blank.
Part II: the employer-level answers
- Line 20: the total number of 1095-Cs filed by or for the employer, across every batch.
- Line 21: whether the employer was part of an aggregated ALE group, meaning a controlled or affiliated service group, in any month. “Yes” means completing Part III column (d) and Part IV.
- Line 22: certifications of eligibility for simplified reporting methods. Only boxes A and D are in use; B and C are reserved.
| Line 22 box | What it certifies | What it changes |
|---|---|---|
| A: Qualifying Offer Method | The employer made qualifying offers (minimum-value coverage, employee self-only cost at or below the federal poverty line safe harbor, with coverage offered to spouse and dependents) to one or more full-time employees. | For employees who received a qualifying offer for all 12 months, the employer may furnish a simplified statement in place of a copy of the 1095-C. Their 1095-Cs still show code 1A. |
| D: 98% Offer Method | Affordable, minimum-value coverage was offered to at least 98% of the employees for whom it files a 1095-C, and coverage was offered to their dependents. | The employer does not have to report a full-time employee count in Part III column (b), or identify which employees were full-time. |
Part III: the month-by-month grid
This is the most consequential part of the form. Each column can be answered for all 12 months on one line or month by month.
| Column | What goes in it | Watch for |
|---|---|---|
| (a) Minimum essential coverage offer indicator | “Yes” if coverage was offered to at least 95% of full-time employees and their dependents that month. | A “No”, or leaving it blank, is what exposes the employer to the “A” penalty. |
| (b) Full-time employee count | Full-time employees for the month, excluding anyone in a limited non-assessment period, such as a new hire’s waiting period. | The count has to match your measurement method. It is not a payroll headcount. |
| (c) Total employee count | All employees: full-time, part-time and those in a waiting period. | Use one consistent day of the month for every month. |
| (d) Aggregated group indicator | Checked for months the employer belonged to an aggregated ALE group. | Complete it only if Line 21 is “Yes”. |
| (e) | Former transition relief indicator. | That relief has expired; leave it blank. |
Part IV: other members of the group
If Line 21 is “Yes”, list up to 30 other members of the aggregated group by name and EIN, starting with those that have the most full-time employees. Each member with its own EIN files its own 1094-C and 1095-Cs. Group membership matters because the 50-employee test is applied to the combined group, even when each company runs its own payroll and its own plan.
Why the 95% answer matters so much
The “A” penalty applies when an employer fails to offer coverage to at least 95% of its full-time employees and at least one of them gets a premium tax credit on the marketplace. It is calculated on the entire full-time workforce, minus the first 30 employees, not just the people who went without an offer.
| Full-time employees | 2026 “A” penalty, if triggered for the full year |
|---|---|
| 60 | $100,200 |
| 100 | $233,800 |
| 250 | $734,800 |
Figures use the 2026 amount of $3,340 per full-time employee after the first 30. The IRS proposes these penalties in Letter 226-J, largely from what Part III says. A “No” that should have been “Yes” can start a penalty process for coverage that was offered. See ACA employer penalties explained.
Filing, deadlines and corrections
| Requirement | For 2025 coverage |
|---|---|
| Paper filing with the IRS | March 2, 2026 |
| Electronic filing with the IRS | March 31, 2026 |
| E-filing required | At 10 or more information returns of any type in the year, counting W-2s and 1099s |
For 2026 coverage, expect the same pattern in early 2027. To correct the authoritative transmittal, file a new, fully completed 1094-C with the “Corrected” box checked. A 1094-C that is not the authoritative transmittal is not corrected on its own. If a filing was missed altogether, see late ACA and Form 5500 filings.
The mistakes we see most often
- Leaving column (a) blank, or checking “No”, in months when coverage was in fact offered to 95% or more.
- Filing more than one authoritative transmittal for the same EIN, often when a payroll vendor and the employer both file.
- Missing the aggregated group: answering “No” on Line 21 when a common owner controls another company.
- Using a payroll headcount in column (b) instead of the full-time count under the employer’s measurement method.
- Checking Line 22 box D without meeting the 98% test, or not checking box A when the 1095-Cs use code 1A.
- Totals on Lines 18 and 20 that do not match the 1095-Cs actually filed.
Check your offer percentages against the affordability rules with our ACA affordability calculator.
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 1095-C?: the employee statement, its codes and deadlines
- 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
What is Form 1094-C used for?
Form 1094-C is the transmittal an applicable large employer files with the IRS alongside its Forms 1095-C. It reports employer-level information: total and full-time employee counts, whether coverage was offered to at least 95% of full-time employees each month, and whether the employer is part of an aggregated group.
Do employees get a copy of Form 1094-C?
No. Form 1094-C is filed only with the IRS. Employees receive Form 1095-C.
What is the difference between Form 1094-C and 1095-C?
Form 1094-C describes the employer and is filed once per EIN as the authoritative transmittal. Form 1095-C describes the coverage offered to one employee and goes to both the IRS and the employee.
What is an authoritative transmittal?
It is the one Form 1094-C, marked on Line 19, that reports an employer’s aggregate data. An employer may file several 1094-Cs with batches of 1095-Cs, but only one may be the authoritative transmittal.
What does Line 22 on Form 1094-C mean?
Line 22 is where an employer certifies eligibility for a simplified reporting method. Box A is the Qualifying Offer Method and box D is the 98% Offer Method. Boxes B and C are reserved and not used.
When is Form 1094-C due?
It is due with the Forms 1095-C. For 2025 coverage, paper filings were due March 2, 2026, and electronic filings were due March 31, 2026.
Have your 1094-C checked before the IRS does
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 your plan eligibility rules and we will check the 95% answers, the counts and the group questions against how your plan actually works, so a coding error does not become a 226-J letter. 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.
