Tax season is a busy and often stressful time for employers. As W-2s are issued and employees start preparing their tax returns, questions about health coverage reporting and Affordable Care Act requirements tend to surface quickly.
For employers that offer health insurance, especially those with growing teams, Forms 1094-C and 1095-C are a key part of ACA compliance. Filing these forms accurately and on time helps reduce the risk of IRS penalties and ensures employees can access the information they may need. If you want to compare what has changed year over year, our prior guide from last February is here: Understanding Forms 1094-C and 1095-C.
Why does ACA reporting matter during tax season?
Tax season is often when ACA reporting issues come to light. Employees may request coverage documentation, payroll teams are reconciling year-end data, and employers are trying to confirm they have met their ACA reporting obligations.
ACA reporting is not just paperwork. Missing information, incorrect codes, or late filings can create avoidable headaches and may trigger penalties. Reviewing your obligations early can help you confirm whether your business qualifies as an Applicable Large Employer and whether your coverage offers and records support accurate reporting.
For employers reviewing benefits at the same time, this is often when questions arise about plan structure and affordability, particularly for those offering small group health insurance.
Quick clarity: Forms 1094-C and 1095-C generally apply to Applicable Large Employers, which are businesses that average at least 50 full-time employees, including full-time equivalents, in the prior year.
What are Forms 1094-C and 1095-C?
Forms 1094-C and 1095-C are part of the IRS reporting system for the ACA employer shared responsibility provisions. While they are often discussed together, they serve different purposes under federal law.
What is Form 1094-C?
Form 1094-C is the transmittal form that Applicable Large Employers file with the IRS. It summarizes employer-level information and transmits the employee Forms 1095-C, including whether coverage was offered to full-time employees and whether the employer is part of an aggregated employer group, as outlined in the IRS instructions for Forms 1094-C and 1095-C (irs.gov).
What is Form 1095-C?
Form 1095-C is the employee-level form that Applicable Large Employers furnish to employees and file with the IRS. It includes details about the coverage offered to each employee, including the months coverage was available and certain affordability indicators required under the Affordable Care Act (IRS ACA overview).
How do ACA health coverage tax forms compare?
The table below compares the most common ACA-related health coverage tax forms and explains who files each one and why. Although the form numbers look similar, they serve very different purposes.
| Form | Who files it | Who receives it | Purpose |
|---|---|---|---|
| 1094-C | Applicable Large Employers | IRS | Transmits Forms 1095-C and summarizes employer ACA reporting |
| 1095-C | Applicable Large Employers | Employees and IRS | Reports employer-offered coverage details for each employee |
| 1095-A | Marketplace enrollees | Individuals and IRS | Reports Marketplace coverage and premium tax credits |
| 1095-B | Insurance carriers or plan sponsors | Individuals and IRS | Confirms minimum essential coverage |
Employees enrolled in individual Marketplace plans may receive Form 1095-A instead, which plays a role in reconciling premium tax credits on their return (explained further in our guide to Form 1095-A, and in Healthcare.gov’s overview of how health coverage ties to taxes at Healthcare.gov).
Who is required to file Forms 1094-C and 1095-C?
Not every employer must file Forms 1094-C and 1095-C. In most cases, the requirement depends on whether your business qualifies as an Applicable Large Employer under ACA rules.
What is an Applicable Large Employer?
An Applicable Large Employer is generally an employer that averaged at least 50 full-time employees, including full-time equivalent employees, during the previous calendar year, as defined by the IRS employer shared responsibility provisions (irs.gov).
What if your business is not an Applicable Large Employer?
If your business is under the threshold, you generally are not required to file Forms 1094-C or 1095-C. However, employees may still receive other health coverage tax forms depending on how they are insured, particularly if they purchase coverage through the Marketplace (Healthcare.gov). Employers comparing coverage approaches may also find it helpful to understand how small group plans differ from individual insurance (learn more here).
Some employers explore reimbursement-based options for certain employee groups, including Individual Coverage HRAs, which allow employers to reimburse employees for individual health coverage (ICHRA for small business).
What filing deadlines should employers confirm?
ACA reporting deadlines can shift slightly each year, and the IRS may issue updates or extensions in certain circumstances. Employers should confirm current-year deadlines directly with the IRS and any reporting partners they work with (IRS ALE reporting guidance), and always refer back to the IRS instructions for Forms 1094-C and 1095-C (irs.gov).
Even when payroll vendors or reporting services assist with filings, employers remain responsible for confirming workforce counts, eligibility rules, and the accuracy of the data submitted.
What common mistakes do employers make with ACA reporting?
ACA reporting is detail-heavy, and many issues are preventable with early review. Common pitfalls include:
- Misclassifying full-time employees or full-time equivalents
- Using incorrect reporting codes, particularly affordability-related codes
- Overlooking aggregated employer group rules
- Assuming a vendor will catch plan design or eligibility issues automatically
- Waiting until deadlines approach to reconcile employee data
Employers looking to reduce administrative burden often benefit from streamlined enrollment and year-round tracking, especially when benefits administration is coordinated alongside payroll and compliance (learn more).
How can health insurance advisors support ACA reporting?
Tax professionals and payroll providers play an important role in filing. Health insurance advisors support ACA reporting by helping ensure benefits strategies and documentation align with reporting requirements throughout the year, including reviewing affordability and employee contribution structures, confirming eligibility definitions and measurement periods, and coordinating with payroll or reporting vendors so plan details match reporting outputs.
This approach is especially valuable for growing businesses without a dedicated HR team, which is a common situation for many small employers we work with (learn how we support small businesses). If you’d like to learn more about the team behind that support, you can also visit About Us and Meet Our Team.
What should you do if you have questions about ACA reporting?
If you are unsure whether your business must file Forms 1094-C and 1095-C, a good starting point is to confirm whether you qualify as an Applicable Large Employer and whether your offer-of-coverage records align with what will be reported. If you want help pressure-testing your approach before filing, you can reach our team through the Contact page.
