Under the Affordable Care Act (ACA), employers with 50 or more full-time employees must report health insurance coverage using Forms 1095-C and 1094-C. These forms ensure compliance with the employer shared responsibility provisions, also known as the “employer mandate.”
What Is Form 1095-C?
Form 1095-C is provided to each full-time employee and details the health coverage offered by the employer. It reports:
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Whether affordable coverage was offered
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Which months the employee was covered
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Whether dependents were included
Employers must also ensure that the coverage meets minimum essential value under ACA rules.
👉 Related reading: Form 1095-B: Minimum Essential Coverage Verification
Affordable Coverage and Minimum Value Requirements
Coverage is considered “affordable” if:
An employee’s share of the premium for employer-provided coverage does not exceed 9.5% of their annual household income.
In addition, employers must offer minimum essential value coverage, which ensures the plan covers a significant portion of health expenses and is not a bare-bones policy.
What Is Form 1094-C?
Form 1094-C acts as the transmittal form for all 1095-C filings. While each employee receives a 1095-C, the employer submits a single 1094-C to the IRS to summarize all coverage information.
This form helps the IRS track compliance with the ACA employer mandate and calculate whether penalties apply.
👉 Learn more about filing ACA forms electronically.
Employer Shared Responsibility Penalties
If an employer does not offer affordable coverage to at least 95% of full-time employees, penalties may apply:
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$2,000 per employee (after the first 30 are excluded) if no coverage is offered
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$3,000 per employee if coverage is offered but is not considered affordable
These payments are designed to encourage large employers to provide coverage rather than shift costs to the government or employees.
Why These Forms Matter
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They ensure employers comply with ACA rules
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They protect employees by confirming access to affordable health insurance
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They provide documentation if the IRS reviews employer health coverage practices
Employers should carefully prepare and file these forms each year to avoid costly penalties.
👉 Need support? Our 1095-C filing software makes it simple to prepare, print, and e-file these forms with the IRS.