The Affordable Care Act (ACA) introduced new filing requirements for businesses offering health coverage. Employers must use Form 1095-C and Form 1095-B to demonstrate compliance with ACA regulations. Not all businesses need to file, but understanding the rules is essential to avoid penalties.
IRS Form 1095-C
Form 1095-C is used by large employers (those with 50 or more full-time employees) to prove they offer affordable health coverage that meets ACA’s minimum essential coverage (MEC) standards.
Employers that fail to provide affordable coverage risk facing IRS penalties under the ACA’s employer mandate.
IRS Form 1095-B
Form 1095-B is filed by entities that provide health coverage, including employers, insurance companies, and certain government programs. It verifies that an individual had minimum essential coverage. Employees then use this form when filing their own tax returns.
Who Must File?
The filing requirements depend on business size and whether the employer is self-insured:
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Large employers (50+ full-time employees): Must file Form 1095-C. If self-insured, they must complete Parts I, II, and III. If not self-insured, only Parts I and II are required.
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Small employers (<50 full-time employees): Generally do not need to file unless they are self-insured. In that case, they must file Form 1095-B, Parts I, II, and IV.
👉 Related: IRS Form 1095 Software
Filing Deadlines
Each employee must receive a copy of their form to file with their tax return. Employers must also submit all forms to the IRS with a transmittal form:
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Form 1094-C (if filing 1095-C)
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Form 1094-B (if filing 1095-B)
👉 Related: Information Return Due Dates and Extensions
Why Compliance Matters
Failing to distribute or file these forms correctly can result in costly IRS penalties. Businesses should consider investing in ACA compliance software or outsourcing to tax professionals to reduce the risk of errors.
👉 Also Read: Form 1095-C Coding Guide
✅ Key Takeaways
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Form 1095-C is required for large employers (50+ employees).
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Form 1095-B is used by small employers that are self-insured and by insurance providers.
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All forms must be filed with the IRS and provided to employees with the correct transmittal forms (1094-B or 1094-C).
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Noncompliance can lead to significant ACA penalties.