What Do the “Series 1” and “Series 2” Codes on Form 1095-C Mean?
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- ACA Compliance
The Series 1 and Series 2 codes on Form 1095-C provide details about the health coverage an employer offers to employees and their dependents. They also show whether the coverage is affordable under the Affordable Care Act (ACA). Since these codes appear in Part II of the form, they are critical for proving ACA compliance and avoiding penalties.
Series 1 Codes (Line 14)
Series 1 codes explain the type of coverage an employer offers. Each code tells the IRS who was offered coverage and whether that coverage met the standard of minimum essential coverage.
For example:
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1A: The employer offered affordable minimum essential coverage with minimum value to the employee, spouse, and dependents.
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1B: The employer offered coverage only to the employee.
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1C: The employer offered coverage to the employee and dependents, but not the spouse.
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1E: The employer offered coverage to the employee, spouse, and dependents.
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1H: The employer did not offer coverage, or the coverage offered did not qualify as minimum essential coverage.
👉 Related: Form 1095-C Coding Guide
In short, employers must carefully select the correct code each month. Otherwise, the IRS may treat the reporting as incomplete or inaccurate.
Series 2 Codes (Line 16)
Series 2 codes show why an employer may qualify for a safe harbor or another exception under the ACA. These codes explain why the employer should not owe a penalty for that month.
Common examples include:
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2A: The employee was not employed for any day of the month.
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2B: The employee was not full-time during the month.
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2C: The employee enrolled in coverage.
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2D: The employee was in a limited non-assessment period (such as a waiting or measurement period).
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2F: Coverage was affordable under the Form W-2 safe harbor.
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2G: Coverage was affordable under the federal poverty line safe harbor.
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2H: Coverage was affordable under the rate of pay safe harbor.
As a result, these codes protect employers from penalties as long as they are applied correctly.
How Employers and Employees Use These Codes
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Employers: Must choose the right Series 1 and Series 2 codes for each month. For instance, if an employer offered affordable coverage and the employee enrolled, the form may use 1E (Line 14) and 2C (Line 16). By choosing the correct codes, employers demonstrate ACA compliance.
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Employees: Can review the codes on their Form 1095-C to confirm they were offered health coverage. In addition, the codes help determine if they qualify for a premium tax credit.
👉 Related: Affordable Care Act Filing Help
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