Form 1095-C

What is Form 1095-C ?


Form 1095-C, also known as the Employer-Provided Health Insurance Offer and Coverage form, is a tax document that large employers must furnish to their employees and file with the IRS. This form is integral to complying with the Affordable Care Act (ACA) and plays a significant role in the tax reporting process for both employers and employees.

Purpose of Form 1095-C

Form 1095-C serves to report health insurance coverage information provided by employers. It is essential for:

  • Confirming an employer's compliance with ACA.
  • Assisting employees in completing their individual tax returns regarding healthcare coverage.
  • Providing details about the health insurance coverage offered to employees, including coverage months and the plan's affordability.

Who Files Form 1095-C?

Form 1095-C is filed by Applicable Large Employers (ALEs), defined as employers with 50 or more full-time employees. These employers are required to:

  • Complete and distribute Form 1095-C to their employees by January 31st of each year, reflecting the prior year's coverage.
  • File copies of the form with the IRS.

Employees' Role with Form 1095-C

While employees receive Form 1095-C from their employer, they are not required to file this form with their tax returns. However, it serves as an important reference document for their own tax filings and healthcare coverage information.

Structure of Form 1095-C

Form 1095-C consists of three parts:

  • Part I: Contains the employee's and employer's (ALE) information, including names, addresses, and tax identification numbers.
  • Part II: Details the employer-offered healthcare coverage, including the coverage offer code, employee's required contribution, and any applicable safe harbor codes for each month.
  • Part III: Lists information about covered individuals under self-insured plans, including names, Social Security Numbers or Tax Identification Numbers, dates of birth, and coverage months.

Filing Form 1095-C

The filing process involves:

  • Preparation: Employers gather health insurance coverage data for their employees.
  • Distribution: Employers provide Form 1095-C to eligible employees by January 31st.
  • Filing: Electronic filing is required for employers with more than 250 forms, due by March 31st. Employers with fewer forms can choose paper filing, due by February 28th.

Importance of Accurate Filing

Accurate completion and timely filing of Form 1095-C are crucial to avoid penalties for non-compliance with ACA regulations. Employers must ensure the correctness of the information provided to both the IRS and their employees.

Navigating Form 1095-C

Managing compliance with ACA and understanding responsibilities related to Form 1095-C can be complex, especially for organizations with large or globally distributed teams. Employers must stay informed about their duties regarding this form and other related compliance processes to ensure smooth operation and legal compliance.