Reviewing the Codes Required on Form 1095-C, Line 14

ACA Reporting is a complex process and the IRS forms used for reporting ACA information are not the easiest. If your business is required to file, you probably know this already! 

One of the biggest challenges when 1095-C Filing is choosing the correct codes for lines 14 and 16. There are many different codes to choose from, and each describes a very specific coverage situation. 

If you are seeking a guide to better understand these codes, you just stumbled upon it! We are providing an overview of Form 1095-C and its dreaded codes!

About Form 1095-C

IRS Form 1095-C is the Employer-Provided Health Insurance Offer and Coverage. Its title basically describes the information that it is used to report. 

The IRS needs to know if the offer of coverage was made to all eligible employees, they also want to know if the coverage was affordable for the employee in relation to their wages. If the employee’s spouse and/or dependents are also covered by this health insurance plan, this information must be included on the form. 

Employers that offer their full-time employees’ health insurance coverage (as required by the Affordable Care Act (ACA), must report some key information about this coverage. 

What Businesses are Required to File Forms 1095-C? 

Applicable Large Employers (ALE) are required to file Form 1095-C with the IRS every year. They are also required to provide recipient copies to their employees. 

Let’s back up for a moment, what is an “Applicable Large Employer”. The IRS defines ALEs as employers with 50 or more employees. Both full-time and full-time equivalent employees are included in this count. 

To learn more about full-time employees versus full-time equivalents, check out this blog!

To calculate your business’ ALE status, check our free tool! It will help you determine this. 

Codes on Form 1095-C

There are two sets of codes on Form 1095-C that employers will need to use. The codes for line 14 and the codes for line 16. The codes on line 14 are used to describe the offer of coverage. 

Form 1095-C, Line 14 Codes

Employers must enter the code that accurately describes the offer of coverage made to the employee for each month of the previous tax year. There must be a code entered for every month of the year, if the code is the same for every month, employers can check the “All 12 months” box in Part 3 of the form.  

Code	Meaning
1A	The Minimum Essential Coverage (MEC) providing Minimum Value (MV) offered to the full-time employees with employee’s contribution was equal to or less than 9.5% of the single federal poverty line. This also represents the contribution of at least minimum essential coverage offered to the spouse and dependent(s).
1B	1B represents that the minimum essential coverage was only offered to the employee. But the coverage was not included for spouse or dependent(s).
1C	1C indicates that the coverage was offered to the employee and dependents, not the spouse.
1D	This indicates that coverage was offered to the employee and their spouse.
1E	Use Code 1E, if minimum essential coverage was offered to employees and at least minimum essential coverage offered to dependent(s) and spouse.
1F	Minimum essential coverage was NOT offered to employees, employee and spouse or dependent(s), or employee, spouse, and dependents.
1G	Use code “1G”, if you offered coverage for at least one month to an individual who was not an employee during any month of the calendar year and the employees who enrolled for one or more months of the year in self-insured coverage.
1H	No health insurance coverage was offered, this can be used for the months that this individual was not an employee.
1I	Reserved for future use.
1J	Minimum essential coverage was offered to the employee and their spouse conditionally, not the dependents.
1K	Minimum essential coverage was offered to the employee and their dependents conditionally, not the spouse.
1L	ICHRA coverage was only offered to the employee, affordability was determined using the employee’s primary residence location ZIP Code.
1M	ICHRA coverage was offered to the employee and dependents (not spouse), and affordability was determined using the employee’s primary residence location ZIP Code.
1N	ICHRA coverage was offered to the employee, spouse, and dependents, and affordability was determined using the employee’s primary residence location ZIP Code.
1O	ICHRA coverage was only offered to the employee, affordability was determined using the employee’s primary work location ZIP Code affordability safe harbor.
1P	ICHRA coverage was offered to the employee and dependents (not spouse), and affordability was determined using the employee’s primary work location ZIP Code affordability safe harbor.
1Q	ICHRA coverage was offered to the employee, spouse, and dependents and affordability was determined using the employee’s primary work location ZIP Code affordability safe harbor.
1R	ICHRA coverage was offered to the employee, spouse, and dependents, it was NOT affordable.
1S	ICHRA coverage was offered to an employee that was not a full-time employee.
1T	ICHRA coverage was offered to the employee and spouse (not dependents), and affordability was determined using the employee’s primary work location ZIP Code affordability safe harbor.
1U	ICHRA coverage was offered to the employee and spouse (not dependents), and affordability was determined using the employee’s primary residence location ZIP Code.

For more information on the Individual Coverage Health Reimbursement Arrangements (ICHRA) and its requirements, click here. 

The ACAwise Solution

At ACAwise, we understand that completing a Form 1095-Cwith the correct codes on line 14 is no easy feat. That’s why our team offers a complete solution for the complex ACA reporting process.

With the ability to create your codes, generate your Forms 1095-C, and e-file 1095-C to the IRS, we take the guesswork and uncertainty out of the equation for businesses and service providers. We also offer solutions for postal mailing recipient copies and ACA State reporting requirements. 

The deadline to e-file ACA forms with the IRS is just over a week away on March 31, 2022. If you haven’t handled your business’ ACA reporting requirements, we strongly urge that you reach out to our team today!