ACA Reporting: IRS Form 1095C Codes & What They Mean

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Form 1095-C Code Series 1 and 2

The Affordable Care Act (ACA) added two employer reporting requirements to the Internal Revenue Code (Code), which will take effect for 2015 reporting:

  • Code § 6056 requires applicable large employers (ALEs) to provide an annual statement to each full-time employee detailing the employer’s health coverage offer (or lack of offer).

  • Code § 6055 requires employers (any size) that provide minimum essential coverage (MEC) under a self-funded (self-insured) plan to provide an annual statement to covered employees and former employees (including information about covered dependents).

The IRS has issued Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, for ALEs to satisfy the reporting requirement under Code § 6056. If the employer self-funds its plan(s), the employer also will use Form 1095-C to satisfy the additional requirement under Code § 6055.

The IRS has created two sets of codes in order to provide employers with a consistent way to describe their offers of health coverage. Each code indicates a different scenario regarding an offer of coverage, or explains why an employer should not be subject to a penalty for a particular employee, for a given month.

Code Series 1 is used for Line 14 of Form 1095-C and addresses:

  • Whether an individual was offered coverage.

  • What type of coverage was offered.

  • Which months that coverage was offered.

Code Series 2 is used for Line 16 of Form 1095-C and addresses:

  • Whether the individual was employed and, if so, whether he or she was full time or part time.

  • Whether the employee was enrolled in coverage.

  • Whether the employer is eligible for transition relief as an employer with a non-calendar year plan or as a contributor to a union health plan.

  • Whether coverage was affordable and, if so, based on which IRS safe harbor.

The list that follows provides an overview of the codes, with descriptions, a brief explanation of when the code should be used, and a clarification of what the effect of choosing a particular code may be.

You can also access the full list of codes, along with descriptions, in the instructions for Form 1095-C.

ACA Code Reference Guide

Form 1095-C: Line 16 – Code Series 1

ACA Code

What Does the ACA Code Mean?

When Should I Use the ACA Code?

1A

You made a Qualifying Offer: You offered Minimum Essential Coverage (MEC) with Minimum Value (MV) to the employee (EE). The offer is affordable because it’s < or = to 9.5% of the single, mainland federal poverty line. You offered MEC to spouse + dependents.

You offer coverage to EEs, spouses and children.

or

You offer MEC providing MV.

or

Your coverage is affordable at the employee-only level because it’s < or = to 9.5% of the single, mainland federal poverty line.

1B

You only offer coverage to EEs. The coverage is MEC and provides MV.

You exclude spouses + children from your plan.

1C

You offer coverage to EEs that is MEC and MV and offer MEC to EEs children. Spouses are not offered coverage.

You exclude spouses from your plan.

1D

You offer coverage to EEs that is MEC and MV and offer MEC to EEs spouses. Children are not offered coverage.

You exclude children from your plan.

1E

You offer coverage to EEs that is MEC and MV and offer MEC to EEs spouses and children

The only difference between this code and 1A is that your coverage may not be affordable or it is affordable based on a safe harbor other than the federal poverty line.

1F

You offer Minimum Essential Coverage (MEC) to the employee (EE) or EE + spouse and/or dependents but the coverage does not provide Minimum Value (MV).

Your coverage does not provide MV.

1G

You offer self-insured coverage to an employee who was not full time at any point in the year.

You offer a self-insured plan.

or

Non-full time employees are eligible for your plan.

or

The employee was enrolled in the plan, for this month.

1H