ACA Reporting: IRS Form 1095C Codes & What They Mean
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 2 is used for Line 16 of Form
1095C and addresses:
This document provides
an overview of the codes, descriptions, an explanation of when the code should
be used, and the effect of choosing a particular code.
IRS Instructions for Forms 1094C and 1095C:
Click on the IRS button below for the link to
PDF Instructions (IRS website).
Series 1 Codes - Form 1095C Line 14:
Code | What
does the code mean? | When
to use the code |
1A | Qualifying
Offer: You
offered MEC (minimum essential coverage) + MV (minimum value) to employee and
you offered at least MEC to spouse + dependents. | ★ You
offer coverage to EEs, spouses and dependents. ★ Your
coverage is affordable at the employee only level because the required
employee contribution is equal to or less than 9.5% (as adjusted) of mainland
single federal poverty line. |
1B | MEC
providing MV offered to employee only. | ★ You
exclude spouses + dependents from your plan(s). |
1C | MEC
providing MV offered to employee and at least
MEC offered to dependent(s) (not spouse). | ★ You
exclude spouses from your plan. |
1D | MEC
providing MV offered to employee and at least
MEC offered to spouse (not dependents). | ★ Dependents
are not offered coverage. ★ Do
not use code 1D if the coverage for the spouse was offered
conditionally. Instead use code 1J. |
1E | MEC
providing MV offered to employee and at least
MEC offered to dependent(s) and spouse. | ★ 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. ★ Do
not use code 1E if the coverage for the spouse was offered
conditionally. Instead use code 1K. |
1F | MEC
offered to employee; employee + spouse or dependent(s); or employee,
spouse and dependents. | ★ You
did not provide Minimum Value, only Minimum Essential
Coverage. |
1G | Offer
of coverage for at least one month of the calendar year to an individual who
was not an employee for any month of the calendar year. - OR
- To
an employee who was not a full-time employee for any month of the calendar
year (which may include month(s) when the individual was not an
employee) - AND – Who
enrolled in self-insured coverage for one or more months of
the calendar year. | Example
1: An individual who is not your employee is offered
coverage (1099 or contractors) for the Summer months for
seasonal work and they were enrolled in self-insured
coverage for Jan-March. Example
2: Let's say that same individual comes back to work
for you in the fall as a part time employee, they were offered coverage as a
part time employee and they were enrolled in self-insured coverage for
Jan-March. ★ Code
1G applies for the entire year or not at all. Therefore, if code 1G applies,
you must enter code 1G on line 14 in the All 12 Months column or
in each separate monthly box for all 12 months. |
1H | No
offer of coverage -
or - Offer
did not meet MEC. | ★ You
did not offer coverage to employee or; ★ You
did offer coverage but it did not meet MEC. May
include one or more months in which the individual was not an employee. |
1I | Reserved | Code
not used for 2016 reporting year |
1J | MEC
+ MV coverage offered to employee and MEC conditionally offered
to spouse; MEC not offered to dependent(s). | ★ Employee
+ conditional offer to spouse. ★ NOT
offered to dependents See
Conditional Offer of Spousal Coverage description below for more details. |
1K | MEC
+ MV coverage offered to employee and MEC offered to dependent(s) and MEC
conditionally offered to spouse. | ★ Employee
+ dependents and a conditional offer to spouse See
Conditional Offer of Spousal Coverage description below for more details. |
Conditional Offer of Spousal Coverage
Description (new codes for 2018):
Code | What
does the code mean? | When
to use the code |
2A | Employee
not employed for any day during the calendar month. | ★ Employee was not employed on any day of the month. ★ Do
not use code 2A if they were an employee on any day of the month. ★ Do
not use code 2A if the employee was terminated that month. |
2B | Employee
not a full-time employee for the calendar month. | ★ Employee
is not a full-time employee and did not enroll in MEC, if offered for the
month. ★ Employee
is a full-time employee and the offer of coverage or enrollment ended before
the last day of the month because the employee terminated during the month. The
offer or enrollment in coverage would have continued for the month had the
employee not terminated. ★ Reference 2D if the employee is in their initial measurement
period and not full-time. |
2C | Employee
enrolled in coverage offered. | ★ Enter
code 2C if the employee was enrolled for the entire month regardless of
whether any other code in Series 2 might also apply. Exceptions
to when you would NOT use Code 2C are listed after this
table - Code Series 2 Exceptions. |
2D | Employee
is in a measurement period. (section
4980H(b) Limited Non-Assessment Period) | ★ If
an employee is in an initial measurement period for the month - use 2D
and not 2B even if the employee is not a full-time employee. ★ For
an employee in a measurement period and if your company is
also eligible for the multiemployer interim rule relief for the month, enter
code 2E not code 2D. |
2E | Multiemployer
interim rule relief. | ★ 2E
is used for any month for which the multiemployer arrangement interim
guidance applies, regardless of whether any other code in Code Series 2
(including code 2C) might also apply. For
guidance regarding Multiemployer Arrangements, please see page 17 in the IRS
1094C/1095C Instructions. |
2F | Form
W-2 safe harbor - Section 4980H affordability. | ★ W-2
safe harbor method was used to determine affordability for this employee
for the year. ★ If the
W2 safe harbor method is used for an employee, it must be used for all
months of the calendar year for which the employee is offered coverage. |
2G | Federal
Poverty Line safe harbor - Section 4980H affordability. | ★ The
federal poverty line safe harbor was used to determine affordability for this
employee for any month(s). |
2H | Rate
of Pay safe harbor - Section 4980H affordability. | ★ The
Rate of Pay safe harbor was used to determine affordability for this employee
for any month(s). |
--- | A note about the Affordability Safe Harbor Codes 2F, 2G
& 2H | ★ An
affordability safe harbor code should not be entered on line 16 for any month
that you did not offer MEC to at least 95% of your full-time or FTE
employees and their dependents. ★ In
your EHX Company Data for your 1094C, you have indicated if MEC was offered
for all 12 months or not; ★ If
MEC was not offered for all 12 months and/or you selected NO for
any month(s), do not use safe harbor Codes 2F, 2G or 2H for those months
marked NO for MEC on your 1094C. For
more information, see the IRS instructions for Form 1094C, Part III, column
(a). |
2I | Reserved | Code
not used for 2016 reporting year |
This document is not meant to provide legal advice - it is only for
your reference.
Consult an attorney if you have questions regarding your
1094C/1095C IRS Forms.