Key Takeaways
- Form 1095-C uses Line 14 to report the coverage offered and Line 16 for enrollment, employment status, or a safe harbor.
- A single Code Series 2 code applies per month, with Code 2C taking priority when an employee is enrolled in the employer’s minimum essential coverage for the full month,
- Lines 15 and 17 depend on the code entered on Line 14. Line 15 reports the employee required contribution, and Line 17 reports the ICHRA ZIP code.
Form 1095-C Codes and How They Work Across Lines 14 to 17
ACA Form 1095-C, Part II, uses monthly codes to report the health coverage offered by an ALE. These Form 1095-C codes indicate the coverage an Applicable Large Employer (ALE) Member offered to each employee.
- Line 14: Reports the type of coverage offered to the employee for the month using Code Series 1.
- Line 15: Reports the employee’s required contribution, but only when the Line 14 code calls for it.
- Line 16: Reports the enrollment status, employment status, an applicable affordability safe harbor, or other Section 4980H relief.
- Line 17: Reports the ZIP code used for certain ICHRA affordability determinations.
ALE employers should complete these lines separately for each month. If the same code applies for all 12 months, employers can use the “All 12 Months” box instead.
Form 1095-C Line 14 Codes: What Code Series 1 Reports to the IRS
Line 14 answers most questions about Form 1095-C codes. This line uses Code Series 1 to report the type of coverage offered to the employee, spouse, and dependents for each month.
| Code | What Employers Report |
|---|---|
| 1A | Minimum essential coverage (MEC) providing qualifying coverage priced at or below the IRS affordability limit. Spouse and dependents receive an offer too. |
| 1B | MEC offering qualifying coverage to employees only. |
| 1C | MEC offering qualifying coverage where dependents also receive an offer, but not the spouse. |
| 1D | The employee and spouse receive MEC. Dependents do not. Use 1J if the spousal offer comes with conditions. |
| 1E | The employee, spouse, and dependents all receive an offer of minimum essential coverage. Use 1K instead if the spousal offer comes with conditions. |
| 1F | The employee receives minimum essential coverage, but it falls short of the IRS minimum value standard. |
| 1G | Coverage offered for at least one month to someone who was not a full-time employee all year (or not an employee at all), who then enrolled in self-insured coverage. |
| 1H | No offer of MEC. |
| 1I | Not currently in use. |
| 1J | The employee receives MEC. The spousal offer comes with conditions, and there are no dependents. |
| 1K | The employee and dependents receive qualifying coverage. The spousal offer comes with conditions. |
ICHRA Codes on Line 14
Employers use a separate group of codes for individual coverage health reimbursement arrangements (ICHRA). The correct ICHRA code depends on who receives the offer and which ZIP code method applies.
| Codes | General Purpose |
|---|---|
| 1L–1N | An affordable ICHRA offer, checked against the employee’s home ZIP code, with the specific code depending on whether coverage is offered to the employee only, employee and dependents, or employee, spouse, and dependents. |
| 1O–1Q | An affordable ICHRA offer, checked against the ZIP code of the employee’s main work site, with the specific code depending on which family members receive the offer. |
| 1R | An ICHRA offer that is not affordable. |
| 1S | An ICHRA offer made to someone who is not a full-time employee. |
| 1T | An ICHRA offer to the employee and spouse only, but not dependents, using the home ZIP code. |
| 1U | The same coverage as 1T, checked against the main work site ZIP code affordability safe harbor. |
| 1V–1Z | Not currently in use. |
Form 1095-C Line 16 Codes: What Code Series 2 Reports to the IRS
Line 16 is where the Form 1095-C codes system captures what happened with an employee each month. It uses Code Series 2 to report enrollment, employment status, Section 4980H relief situation, or an affordability safe harbor for each calendar month.
| Code | Meaning |
|---|---|
| 2A | The employee was not employed during the month. |
| 2B | The employee was not a full-time employee for that month and did not enroll, or coverage ended early due to termination. |
| 2C | Employee enrolled in the minimum health coverage offered by the employer every day of the month. |
| 2D | Employee was in a Section 4980H(b) Limited Non-Assessment Period. |
| 2E | Multiemployer interim rule relief applied for the month. |
| 2F | The employer used the Form W-2 affordability safe harbor. |
| 2G | The employer used the federal poverty line affordability safe harbor. |
| 2H | The employer used the rate-of-pay affordability safe harbor. |
| 2I | Not currently in use. |
Important Note:
Employers can leave Line 16 blank when no code applies for a month. If more than one code applies to the same month, the IRS has rules for determining which one to use.
Code 2C generally takes priority when an employee is enrolled in employer-provided minimum essential coverage for every day of the month, even when another code might apply. Exceptions apply for multiemployer relief and for terminated employees on COBRA.
Form 1095-C Line 15 and Line 17: When Should Employers Complete Them
Lines 15 and 17 add extra detail to certain codes already entered on Line 14. These two lines do not require their own code.
| Line | When Do Employers Complete It? | What to Report |
|---|---|---|
| Line 15 | When Line 14 shows a code that requires a contribution amount (1B, 1C, 1D, 1E, 1J, 1K, 1L–1Q, 1T, or 1U). | Employee Required Contribution. For ICHRA offers, this is the lowest-cost silver plan premium minus the monthly ICHRA amount. |
| Line 17 | When Line 14 shows an ICHRA code (1L–1Q, 1T, or 1U). | The ZIP code used to determine ICHRA affordability, based on the residence or work location. |
The amount on Line 15 may differ from what the employee actually pays for coverage. This happens when an employee chooses more expensive coverage, such as family coverage.
Employers should never leave Line 15 blank when a Line 14 code on the table requires it. If the required contribution is zero, employers must enter “0.00” instead.
For Line 17, employers should complete it only for the ICHRA codes listed in the table above. This line reports the ZIP code used to check ICHRA affordability.
Form 1095-C Code Combinations Employers Can Use
Form 1095-C codes can be combined based on an employee’s actual situation each month.
| Employer Scenario | Line 14 | Line 16 | Filing Result |
|---|---|---|---|
| Employee gets a qualifying offer of coverage | 1A | Applicable code, or blank space where allowed | Reports the qualifying offer. |
| Employee and family are offered minimum-value coverage, and the employee signs up | 1E | 2C | Reports the offer and full-month enrollment. |
| The employee did not work at all during the month | 1H | 2A | Reports no offer and no employment. |
| The new employee is in a waiting period (Limited Non-Assessment Period) | Based on the actual offer made | 2D | Reports the applicable waiting-period relief. |
| Affordable, minimum-value coverage is offered using the rate-of-pay safe harbor, and the employee does not enroll | Applicable Series 1 code | 2H | Reports the offer and the safe harbor used. |
Form 1095-C Coding Errors Employers Should Avoid
Even a small data entry mistake in Form 1095-C codes may cause inaccurate ACA reporting and even trigger IRS penalties. Some common errors to avoid include:
- Using Code 2C without the employee being enrolled for the full month.
- Using Code 2A for a month during which the employee worked for at least a day.
- Assuming the safe harbor rules apply without checking it.
- Completing Line 15 when it is not required and skipping the IRS priority order on Line 16.
- Reusing one code all year, despite changes to the employee’s circumstances.
- Reporting Code 1G for only part of the year, instead of using it for all 12 months.
FAQs
1. Can Form 1095-C codes change every month?
Yes, an employer may need different codes from month to month. A change in coverage offer, enrollment, or employment status can affect the correct code.
2. Can Line 16 be left blank on Form 1095-C?
Yes, Line 16 can be left blank for a month when no Code Series 2 situation applies. This includes months with no enrollment, no safe harbor, or no other listed condition.
3. Does Line 15 show the premium the employee paid?
No, Line 15 reports the Employee Required Contribution, generally the cost of the lowest-cost self-only coverage that meets the minimum value. This can differ from what the employee pays, such as when they choose family coverage.
4. When must employers complete Line 17?
Employers complete Line 17 for certain ICHRA codes on Line 14. Some use the employee’s primary residence ZIP code. Others use the primary employment-site ZIP code safe harbor. The correct ZIP code depends on which code applies.
Get Form 1095-C Codes Right, Every Time
1099Online guides employers through Line 14 and Line 16 codes each month, with built-in checks and guided filing workflow.