It’s easy to get lost in all those lines and codes on the Form 1095-C. Below you’ll find a summary of Lines 14-17 and Part III, some 1095-C examples, and some deeper explanation on the difference between Lines 14 and 16. Use the links below to quickly navigate throughout this article about Form 1095-C codes.
Line 14 on the 1095-C form provides details of the coverage that was offered throughout the year.
The code on line 14 may vary as to the quality of the coverage offering. A line 14 response is reported for each month of the year. Also, line 14 codes do not indicate what coverage the employee enrolled in, instead the codes indicate what coverage was offered to the employee. You can use a code that indicates coverage if the employee was offered coverage for every day of the month. If the offer of coverage was not good for every day of the month, 1H will be applicable. The two most popular Codes for line 14 when coverage is offered are 1A and 1E.
*Line 14 does NOT indicate whether coverage was accepted. That information is reported in Line 16.
**In the above example, the employee had the same coverage available for the entire year, so the response is listed only once, at the top of the column. If the available coverage changed during the year, a separate response would be entered for each month.
Line 15 provides the amount of the employee required monthly contribution. The amount listed on line 15 may not be reflective of the medical plan cost that the employee actually enrolled in. This amount should represent the cost for the lowest-cost, self-only coverage offered to that employee.
Line 15 should only be populated if line 14 has a code of 1B, 1C, 1D, 1E, 1J, 1K, 1L, 1M, 1N, 1O, 1P or 1Q on line 14. If one these codes is listed in the “All 12 Months” column on line 14, there should also be a line 15 entry for all 12 months. If line 14 does not have one of these codes for any given month(s), line 15 should be left blank for that month.
Line 16 provides information about the employees’ eligibility for health coverage and the coverage status for each month of the calendar year. Similar to line 14, a coverage code can only be used if the employee was actually enrolled for every day of the month. Otherwise, a different code will need to be used.
For each calendar month, enter the applicable code, if any, from Code Series 2. Enter only one code from Code Series 2 per calendar month. The instructions below address which ACA Form 1095-C code to use for a month if more than one code from Series 2 could apply. If the same code applies for all 12 calendar months, you may enter the code in the “All 12 Months” box and not complete the monthly boxes. If none of the codes apply for a calendar month, leave the line blank for that month.
Code Series 2—Section 4980H Safe Harbor Codes and Other Relief for ALE Members:
An ALE Member enters the applicable Code Series 2 indicator code, if any, on line 16 to report for one or more months of the calendar year that one of the following situations applied to the employee.
• The employee was not employed or was not a full-time employee;
• The employee enrolled in the minimum essential coverage offered;
• The employee was in a Limited Non-Assessment Period with respect to section 4980H(b);
• The ALE Member met one of the section 4980H affordability safe harbors with respect to this employee; or
• The ALE Member was eligible for multiemployer interim rule relief for this employee.
If no indicator code applies, leave line 16 blank. In some circumstances more than one indicator code could apply to the same employee in the same month. For example, an employee could be enrolled in health coverage for a particular month during which he or she is not a full-time employee. However, only one code may be used for a particular calendar month. For any month in which an employee enrolled in minimum essential coverage, in general, indicator code 2C reporting enrollment is used instead of any other indicator code that could also apply (but see the exceptions to this rule below, regarding the multiemployer interim rule relief and enrollment in COBRA continuation coverage or other post-employment coverage). For an employee who did not enroll in health coverage, there are some specific ordering rules for which safe harbor code to use on IRS Form 1095-C. See the descriptions of the codes.
Note. There is no specific code to enter on line 16 to indicate that a full-time employee who received an offer of coverage either did not enroll in the coverage or waived the coverage.
• 2A. Employee not employed during the month. Enter code 2A if the employee was not employed on any day of the calendar month. Do not use code 2A for a month if the individual was an employee of the ALE Member on any day of the calendar month. Do not use code 2A for the month during which an employee terminates employment with the ALE Member.
• 2B. Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in minimum essential coverage, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month).
• 2C. Employee enrolled in health coverage offered. Enter code 2C for any month in which the employee enrolled for each day of the month in health coverage offered by the ALE Member, regardless of whether any other code in Code Series 2 might also apply (for example, the code for a section 4980H affordability safe harbor) except as provided below. Do not enter code 2C in line 16 for any month in which the multiemployer interim rule relief applies (enter code 2E). Do not enter code 2C in line 16 if code 1G is entered in line 14. Do not enter code 2C in line 16 for any month in which a terminated employee is enrolled in COBRA continuation coverage or other post-employment coverage (enter code 2A). Do not enter code 2C in line 16 for any month in which the employee enrolled in coverage that was not minimum essential coverage. Do not enter code 2C in line 16 if 1A is entered on line 14. Code 1A on Line 14 will always be blank on line 15 and 16.
• 2D. Employee in a section 4980H(b) Limited Non-Assessment Period. Enter code 2D for any month during which an employee is in a section 4980H(b) Limited Non-Assessment Period. If an employee is in an initial measurement period, enter code 2D (employee in a section 4980H(b) Limited Non-Assessment Period) for the month, and not code 2B (employee not a full-time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the ALE Member is also eligible for the multiemployer interim rule relief for the month, enter code 2E (multiemployer interim rule relief) and not code 2D (employee in a section 4980H(b) Limited Non-Assessment Period).
• 2E. Multiemployer interim rule relief. Enter code 2E for any month for which the multiemployer arrangement interim guidance applies for that employee (Union), regardless of whether any other code in Code Series 2 (including code 2C) might also apply. This relief is described under Offer of Health Coverage in the Definitions section of these instructions. Note. Although ALE Members may use the section 4980H affordability safe harbors to determine affordability for purposes of the multiemployer arrangement interim guidance, an ALE Member eligible for the relief provided in the multiemployer arrangement interim guidance for a month for an employee should enter code 2E (multiemployer interim rule relief), and not codes 2F, 2G, or 2H (codes for section 4980H affordability safe harbors).
• 2F. Section 4980H affordability Form W-2 safe harbor. Enter code 2F if the ALE Member used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an ALE Member uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee received an offer of health coverage.
• 2G. Section 4980H affordability federal poverty line safe harbor. Enter code 2G if the ALE Member used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s).
• 2H. Section 4980H affordability rate of pay safe harbor. Enter code 2H if the ALE Member used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s).
Note. An affordability safe harbor code should not be entered on line 16 for any month that the ALE member did not offer minimum essential coverage to at least 95% of its full-time employees and their dependents (that is, any month for which the ALE member checked the “No” box on Form 1094-C, Part III, column (a)). For more information, see the instructions for Form 1094-C, Part III, column (a).
Sometimes Line 14 and Line 16 of the Form 1095-C can become confusing. The IRS provides two sets of codes, one for line 14 and one for line 16 that employers will need to use in a consistent way to describe their offers of health coverage. Each Code describes a different situation as to the offer of coverage. The IRS uses these codes to determine if a penalty for an employee (on a monthly basis) is warranted.
The first set of IRS Codes is for Line 14 on the 1095-C. The 3 basic explanations of the purpose for these Line 14 Codes are listed below.
Was the Individual offered coverage?
What type of coverage was offered to the employee?
Which months were the coverages offered to the employee?
The second listing of IRS Codes is for Line 16 on the 1095-C forms. The 3 basic explanations of the purpose for these Line 16 Codes are listed below.
Is the employee employed and if so is he a Full Time or Part Time employee?
Was the employee enrolled in coverage?
Was the coverage affordable and if so the Safe Harbor that was used?
Line 17: Zip Code – Location of Employer Determined Eligibility (New for 2020)
New to the 1095-C form in 2020 is Line 17 in Part II. Employers must provide monthly zip code information for employees who were offered coverage through an individual coverage HRA. The zip code entered depends on whether the affordability for the coverage was based on the primary residence of the employee, or the employee’s primary work location. Note that this change will not affect employers who did not adopt individual coverage HRAs as part of their ESR requirement strategy.
If an employer utilized individual coverage HRAs and completes line 14 with code 1L, 1M, or 1N, line 17 should be completed with the ZIP code of the employee’s primary residence (note that this should generally be the same as line 6 in Part I).
Alternatively, if an employer utilized individual coverage HRAs and completes line 14 with code 1O, 1P, or 1Q, the employee’s primary work location ZIP code should be entered on line 17 (note that this could be the same as line 13 Part I but might not if the employer has multiple work locations).
Part III is only required to be populated by employers with self-insured health plans. Therefore, if your plan is fully-insured, this section will not be populated. This section should list the employee and all of their covered dependents during the calendar year. If the individuals were covered all 12 months, there should be an “X” in column (d). Unlike Part II, if the individuals were not covered all 12 months, but were covered at least one day during any given calendar month, there will be an “X” in the corresponding month(s).
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