What Is Form 1095-C? Everything You Need To Know

A 1095-C form is one of the required forms that Applicable Large Employers (ALEs) use to report to the IRS information about the health insurance offered to employees. In general, an ALE is an employer with an average of at least 50 full-time employees working at least 30 hours per week, including full-time equivalent employees, during the prior calendar year. If your company is obligated to complete, file Forms 1095-C with the IRS, and distribute 1095-C forms to applicable employees, you may want to ask if your payroll provider includes this report as part of their payroll tax services.

What Is Form 1095-C and What Is It Used For?

The 1095-C form, Employer-Provided Health Insurance Coverage, reports information about the type of health insurance offered to applicable employees. As of 2015, ALEs must complete this tax form to remain in compliance with the Affordable Care Act (ACA). All full-time employees must receive this informational form regardless of whether they participate in the company health plan. Part-time employees will receive the form only if the company is self-insured and they enroll in the company-sponsored health plan.

What’s Included in Form 1095-C?

The 1095-C form includes information about an employer's health care plans, the cost of coverage, and the months coverage was offered. It is divided into three parts.

Part I

The first part of the form reports information about the employee on lines 1-6, including their name, Social Security Number, and address. Lines 7-13 report information about the employer, including their address, a contact phone number, and an Employer Identification Number (EIN). Note that an EIN must complete this form.

Part II

In the second section of the form, the employer will provide details about the health care plans offered. If the employee receiving the form is eligible for health care coverage, enter their age. Employers should also identify the months when the employee was eligible to participate and the month the plan year begins. Additional codes, as specified in the IRS Form 1095-C instructions, will indicate the type of plan offered.

Part III

The last part of the form contains information about the employee’s family members who enrolled in the health care coverage, including their date of birth and tax identification number.

Who Has To File Form 1095-C?

Additionally, ALEs must file Forms 1094-C and 1095-C with the IRS. Employees do not need to fill out any information on the form, but they should keep the copy they received with their annual tax records. Any questions about the information on the form can be addressed to the employer or a professional tax preparer.

Does Everyone Receive a 1095-C?

ALEs must complete a 1095-C tax form for every full-time employee eligible for health care coverage for one or more months during the calendar year. Full-time employees who enroll in the company’s health care plan will receive the form, as will full-time employees who decline the coverage available. Part-time employees enrolled in a self-insured company health care plan will receive a 1095-C. Any part-time employees who do not participate in the plan do not need to receive this form. Self-insured ALEs may use either the 1095-C or 1095-B for every non-employee (e.g., retiree) enrolled in the coverage offered.

How Do Employees Receive Form 1095-C?

Generally, employees will receive this form in the mail by the end of January for health care insurance coverage related to the previous tax year. However, the IRS permanently provided an automatic 30-day extension from the January 31 due date for ALEs to provide forms 1095-C to applicable employees. For calendar year 2024, an Applicable Large Employer (ALE) must furnish Form 1095-C to applicable employees by March 3, 2025. This is the expected due date, as the IRS had not issued a final due date at the time this article was updated. Note that only the employed person receives the form. The employee must provide a copy if a covered family member needs one.

What Is the Deadline To File 1095-C Forms With the IRS?

The deadline for ACA filing of all paper forms with the IRS remains February 28. However, the deadline is March 31 if filing electronically. The due date is the next business day if it falls on a weekend or legal holiday. For the calendar year 2024, Form 1095-C must be filed by February 28, 2025, if filing on paper, or March 31, 2025, if filing electronically. These are expected due dates, as the IRS has not issued final due dates at the time this article was updated. It should be noted that all employers that file a combined total of 10 or more information returns, including Forms 1094-C and 1095-C, must file the forms electronically.

Is There a Penalty if You Don’t File Form 1095-C?

Employers who fail to meet filing or furnishing deadlines or report incorrect information on an informational return may be subject to IRS penalties. For forms due in 2025, failure to file an informational return such as the 1095-C can result in a penalty of $330 per form, capped at $3,987,000. A similar penalty structure applies to filing an incorrect form. If you believe you have reasonable cause for failing to file, you may wish to speak to your tax professional about requesting a waiver of these penalties.

Where To File 1095-C Forms and Avoid Penalties With Paychex’s Tax Services

Compiling tax forms and reporting information to the IRS are part of employers' payroll responsibilities. Falling out of compliance can result in spending additional time back-tracking through payroll records and bearing the added cost associated with tax penalties. Paychex’s Employer Shared Responsibility services can be a cost-efficient resource to help your business comply and avoid potentially costly mistakes, such as failing to file a 1095-C.