What Is Form 1095-C?

Form 1095-C, titled Employer-Provided Health Insurance Offer and Coverage, is an IRS tax form used by applicable large employers (ALEs) to report health insurance coverage offered to their employees. It is part of the Affordable Care Act (ACA) compliance framework and is used to demonstrate that an employer has met its obligation to offer minimum essential health coverage that is affordable and provides minimum value.

This form is sent to employees and filed with the IRS to help both parties determine compliance with health insurance requirements. It also provides information that individuals may need when filing their federal tax return.

Who Receives Form 1095-C?

Employees who worked full-time (30 hours or more per week) for an ALE during any month of the calendar year typically receive a copy of Form 1095-C. This includes workers who may not have enrolled in the employer-sponsored plan but were still offered coverage. Some part-time employees may also receive a 1095-C if they were enrolled in coverage through their employer.

The IRS defines an ALE as an employer with 50 or more full-time employees, including full-time equivalents, during the preceding calendar year. These employers are required by law to offer health insurance to at least 95% of their full-time workforce and their dependents, or potentially face penalties under the Employer Shared Responsibility Provisions (ESRP).

What Information Is on Form 1095-C?

Form 1095-C is composed of three parts:

• Part I identifies the employee and the employer. It includes personal information such as the employee’s name, address, and Social Security number, as well as the employer’s name, address, and Employer Identification Number (EIN).
• Part II provides monthly details about the health coverage that was offered to the employee. It indicates whether the employer offered coverage that met the ACA’s standards for affordability and minimum value, and includes codes to reflect the type of coverage offered, the months it was available, and whether the employee was enrolled.
• Part III is only completed by employers that self-insure. This section lists each individual (employee and any dependents) who received coverage under the self-insured plan, along with the months they were enrolled.

Why Form 1095-C Matters

Form 1095-C serves multiple purposes in the broader context of tax compliance and health care regulation. First, it provides documentation to the IRS that the employer is meeting ACA requirements. Second, it helps employees determine their eligibility for a premium tax credit if they chose to purchase insurance through the Health Insurance Marketplace instead of accepting employer coverage.

Although individuals no longer face a federal penalty for not having health insurance coverage (after the individual mandate was effectively repealed beginning in 2019), some states have their own mandates. In those states, Form 1095-C can still be used to demonstrate compliance.

Timing and Filing Requirements

Employers must provide Form 1095-C to eligible employees by a deadline set annually by the IRS — typically by the end of January or early March if an extension is granted. The form must also be filed with the IRS using Form 1094-C as a transmittal. The filing deadline is generally at the end of February for paper submissions or the end of March if filing electronically.

Electronic filing is required for employers submitting 10 or more information returns (including W-2s, 1099s, and 1095s) in a calendar year.

Common Employee Questions

One of the most frequent questions employees have is whether they need Form 1095-C to file their taxes. For most individuals, the form is not required to complete a federal tax return. However, it's useful to keep it for records, particularly if the IRS questions whether they had qualifying coverage during the year.

Employees who see unfamiliar codes in Part II may also be confused. These codes help the IRS determine whether the employer met its ACA obligations but don’t necessarily affect the employee's tax filing directly. For those who did not accept coverage or were not eligible, the form helps confirm whether a penalty might apply under any applicable state-level mandates.

Employers and Penalties

Employers that fail to distribute or file Form 1095-C as required may face penalties under the Internal Revenue Code. Penalties can apply for each form not provided to an employee or not submitted to the IRS. The amounts can add up quickly for larger employers, especially if failures are deemed intentional.

The IRS also uses this form to assess whether an employer owes a payment under the ESRP. If an employee receives a premium tax credit and the employer did not offer qualifying coverage, the employer could be liable for a penalty.

The Bottom Line

Form 1095-C is a key document in maintaining ACA compliance for large employers and ensuring transparency about health coverage for employees. While individuals don’t usually need the form to file taxes, it provides a helpful record of what was offered and whether coverage was accepted. For employers, accurate and timely filing is essential to avoid costly penalties and demonstrate compliance with federal law.