ACA Compliance 101: How to File 1094-C and 1095-C Correctly

It’s a difficult task for HRs to accurately fill out your form 1094-C and form 1095-C. If you are an employer, especially an employer with more than 50 full-time workers, then you are obligated under the Affordable Care Act (ACA) to proclaim the coverage you offer for health. Let’s be clear about what you must do, as well as do it right.

You must complete these forms correctly. Mistakes can lead to IRS alerts, missed tax refunds, or even huge fees. QuickBooks, Quicken, or by hand, you must familiarize yourself with your 1094-C and 1095-C forms. It’s the expectation for the IRS, and you can’t disappoint your employees.

What Are Forms 1094-C and 1095-C?

Form 1095-C is a form you give to each full-time employee. It shows the kind of health insurance coverage you offered them and when. Think of it as a receipt for health insurance coverage.

While, Form 1094-C is the summary you send to the IRS. It bundles together all the 1095-C forms you issued to employees. While 1095-C goes to your workers, 1094-C goes to the government.

And then there’s Form 1095-B. Don’t mix it up—it’s for small employers or insurers, not ALEs (Applicable Large Employers).

Who Must File?

If you have 50 or more full-time or full-time equivalent (FTE) employees, you’re an ALE—and yes, you must file.

Self-insured? You have extra steps. You must report on each person covered—employees and dependents. Even non-ALEs need to file if they provide self-funded coverage.

This is where understanding the ACA, health insurance rules, and United States federal policy becomes more than just workplace knowledge—it’s a compliance checklist.

Key Deadlines to Remember

Mark your calendars. Missing a deadline could cost you.

• Paper Filing: Due by February 28 (or next business day)
• Electronic Filing: Due by March 31 (if you’re submitting 250 or more forms)
• Employee Copies: Must be sent by March 2

Late or missing forms can trigger IRS letters like Letter 5699 or CP 220 and lead to penalty payments. Always stay one step ahead.

Step-by-Step Guide to Completing Form 1095-C

Let’s now understand how to fill out Form 1095-C correctly:

Part I: Employee and Employer Information

Start simple. You’ll need:

• Employee name, address, and Social Security Number (SSN)
• Employer name, address, EIN (Employer Identification Number), and a contact person

This is your basic info section—get it right to avoid future problems.

Part II: Employee Offer and Coverage Details

Here’s where the coding starts. Use the right codes to avoid delays or rejections.

• Line 14: This shows what kind of coverage you offered. Use codes like 1A (qualifying offer), 1E (coverage for employee and dependents), or 1H (no offer).
• Line 15: Enter the monthly cost of the lowest-priced self-only coverage.
• Line 16: Safe harbor codes like 2E can help you avoid penalties.

Incorrect codes here can create headaches like an income tax audit or a delay in your employee’s tax return.

Part III: Covered Individuals (Self-Insured Employers Only)

If you’re self-insured, list every covered person:

• Names of employees and dependents
• Months of coverage

This is key for ACA reporting and impacts things like the earned income tax credit or child tax credit eligibility.

How to Complete Form 1094-C

Now, let’s understand the steps to complete Form 1094-C:

Part I: Employer Information

Just like 1095-C, start with your basic details:

• Employer name, EIN, address
• IRS contact person

Part II: ALE Member Information

Here you certify your compliance:

• Whether you offered coverage to at least 95% of full-time employees
• Part of an ALE group? You must report that too

This section ties into corporate tax and broader corporate finance responsibilities