ACA reporting: Forms 1094-C and 1095-C for large employers

Applicable large employers (ALEs), meaning those with an average of at least 50 full-time employees including full-time equivalents in the prior calendar year, must file Form 1094-C (the transmittal) and a Form 1095-C for each full-time employee with the IRS, and furnish a copy to the employee. For coverage year 2025, the forms were due March 2, 2026 to employees and to the IRS on paper, or March 31, 2026 if filed electronically. The IRS uses these forms to administer the employer shared responsibility payment and to verify employees' premium tax credits.

Who has to file

• Applicable large employers. An ALE is an employer that employed an average of at least 50 full-time employees, including full-time equivalents, on business days during the preceding calendar year (26 CFR 54.4980H-1). A full-time employee averages at least 30 hours of service a week, or 130 hours in a calendar month. See applicable large employer and full-time equivalent; The ACA employer mandate: who must offer coverage and the 2026 penalties explains the mandate itself. Related companies are aggregated, and each ALE member files its own 1095-C forms, with an authoritative transmittal covering the group.
• Self-insured employers. An ALE with a self-funded health plan also completes Part III of Form 1095-C for covered employees and others. An employer under 50 FTEs that self-insures files Form 1095-B and Form 1094-B instead. Insured employers under 50 FTEs have no ACA filing; the insurer reports coverage.
• ICHRA sponsors. An employer offering an ICHRA reports it using the individual coverage HRA offer codes (1L through 1U) on line 14, as listed in the IRS 2025 instructions. See ICHRA explained: individual coverage HRAs for employers.

These obligations apply even if no penalty is owed. An ALE that offers coverage to at least 95% of full-time employees can still owe the penalty under 4980H(b) for individuals who get a premium tax credit, and the IRS identifies that from the Form 1095-C data.

What the forms report

Form 1095-C has three parts:

• Part I: employee name, address, employer details, and for ALE members the plan start month.
• Part II: by month, the offer of coverage code (line 14, codes 1A through 1U), the employee's share of the lowest-cost self-only premium (line 15), and the safe harbor code (line 16, codes 2A through 2I). Line 16 is how the employer tells the IRS why it should not owe a payment for that month: 2A for not employed, 2B for not a full-time employee, 2C for enrolled in coverage, 2D for a limited non-assessment period, and 2F, 2G and 2H for the affordability safe harbors (Form W-2, federal poverty line, and rate of pay).
• Part III: covered individuals, completed only for self-insured plans.

Form 1094-C reports aggregate data: total number of 1095-C forms, whether the employer offered coverage to at least 95% of full-time employees in each month, and whether it is part of an aggregated ALE group.

The affordability safe harbors use the indexed percentage, which is 9.96% for plan years beginning in 2026 (IRS Rev. Proc. 2025-25), up from 9.02% in 2025. It is 10.22% for 2027 (Rev. Proc. 2026-26). The 2026 penalty amounts under section 4980H are $3,340 for failing to offer coverage to substantially all full-time employees (4980H(a)) and $5,010 for each full-time employee who gets a premium tax credit when coverage is unaffordable or lacks minimum value (4980H(b)), per IRS Rev. Proc. 2025-26.

Deadlines for the 2026 filing season

For coverage year 2025 (forms filed in 2026), the IRS 2025 instructions for Forms 1094-C and 1095-C provide:

The deadlines slide when they fall on a weekend or holiday. For coverage year 2026, the forms are due in early 2027 on the same pattern, but confirm the dates in the IRS 2026 instructions once released rather than counting them yourself.

Electronic filing and the Paperwork Burden Reduction Act

Electronic filing is required for any filer that must submit 10 or more information returns during the year, counted in the aggregate across most return types (IRS 2025 instructions). Older IRS web pages still mention a 250-return threshold; that figure was reduced. For an ALE with even a modest staff, that means e-filing through the IRS's AIR system, usually through the payroll vendor or a benefits platform.

The Paperwork Burden Reduction Act (Pub. L. 118-167, December 23, 2024) added a furnish-on-request option. An employer satisfies the duty to furnish the 1095-C by posting a clear, conspicuous and accessible notice on its website saying that employees can request a statement, and then furnishing the statement by the later of January 31 or 30 days after the request. The notice has to be posted by the extended furnishing date and maintained through October 15. According to IRS Notice 2025-15, it applies for returns for calendar years after 2023 and covers ALEs and their full-time employees as well as insurers and self-insured employers. The employer still files every return with the IRS. A website notice that is missing, late or hard to find means the alternative method was not met, and the employer would then face the ordinary furnishing penalty.

Many employers still send forms to everyone, because employees use them to complete tax returns and because the option adds a tracking burden. If you rely on the website notice, keep a record of posting dates and request fulfillment.

Penalties for reporting failures

For returns due in 2026 (coverage year 2025), the information return penalty is $340 per return and $340 per payee statement, with a calendar-year maximum of $4,098,500 for each, according to the IRS 2025 instructions. Intentional disregard carries higher amounts, and reasonable-cause relief is available. The reporting penalty is separate from the 4980H assessment. The IRS also sends Letter 226-J proposing a 4980H payment based on the 1094-C and 1095-C data; employers can respond with corrections, so accuracy on line 14 and line 16 matters.

Common errors

• Counting a month as "not full-time" for a variable-hour worker without documenting the look-back measurement method.
• Using code 1E (offer to employee, dependents and spouse) when the plan excludes spouses.
• Reporting the wrong affordability safe harbor for a union or multi-state workforce, or using a poverty line from the wrong year.
• Forgetting terminated employees who were full-time during the year.
• Mismatched Social Security numbers. The IRS requires a TIN solicitation process; for dependents with missing SSNs, the employer must make reasonable efforts.
• Not filing when no one received an offer. An ALE still files for every full-time employee.

Worked example (hypothetical)

Say a 120-employee staffing firm offers an insured major medical plan to full-time employees with a $140 monthly employee share for self-only coverage in 2026. Under the federal poverty line safe harbor, the maximum affordable employee share is 9.96% of the FPL divided by 12; the IRS does not publish that dollar amount, and the HHS guideline used depends on the plan year start. The firm uses code 1E (minimum value coverage offered to the employee, spouse and dependents) on line 14, enters $140 on line 15, and enters 2G on line 16 for months where it relies on the poverty line safe harbor. It e-files through its payroll provider, posts the employee statement, and keeps a record of the measurement periods for part-time and seasonal workers (Benefits for part-time and seasonal workers: ACA and eligibility rules).

Related federal and state filings

Form 5500 is a separate DOL filing (form 5500 for health and welfare plans: who files and when). Some states, including California, Massachusetts, New Jersey, Rhode Island and the District of Columbia, have their own individual mandate and require reporting or copies of coverage statements; check the state tax agency.

Key takeaways

• ALEs with 50 or more full-time employees including FTEs file Form 1094-C and a 1095-C for each full-time employee, even when no penalty is owed.
• For coverage year 2025, forms were due March 2, 2026 to employees and paper filers, and March 31, 2026 if filed electronically; the 2026 dates will follow in 2027 and should be checked against the instructions.
• Since the Paperwork Burden Reduction Act, a website notice can replace automatic delivery of statements to employees, but IRS filing is still required.
• The 2026 affordability percentage is 9.96%, and the 4980H amounts are $3,340 and $5,010.
• Reporting penalties are $340 per return for 2025 returns (maximum $4,098,500), and filers of 10 or more returns must file electronically.