IRS Form 1095-C Instructions for 2021

Part I - Employee & Employer details
Part II - Employer Offer of Coverage
Part III - Covered Individuals

Update: The Final version of Form 1095-C for 2021 Tax year was released by the IRS. Find out more here

Form 1095-C Line by Line Instructions - Explained

Updated on December 29, 2021 - 10:30 am by, TaxBandits

IRS Form 1095-C is used by Applicable Large Employers (ALEs) to report the health insurance coverage information provided to their full-time employees and employee’s dependents. For the tax year 2021, form 1095-C has been updated. And, employers should use the updated 1095-C form to file with the IRS this year.

To make 1095-C filing easy for you, we have given detailed instructions in this article.

Table of Content:

Part I (Employee) - Details about Employee
Part I (Employer) - Details about Applicable Large Employer (ALE)
Part II - Employer Offer of Coverage
Part III - Covered Individuals

1. Part I (Employee) - Details about Employee

Part I of 1095-C comprises two columns to report employee and employer information. First, let’s see how to fill the employee details in Form 1095-C, Part I.

Line 1

Enter the name of your employee (first name, initial, last name).
Line 2

Enter the employee’s Social Security Number (SSN).
Line 3

Enter the employee’s street address, including apartment number.
Line 4

Enter the employee’s city or town.
Line 5

Enter the employee’s state or province
Line 6

Enter the employee’s country and ZIP or foreign postal code.

2. Part I (Employer) - Details about Applicable Large Employer (ALE)

In Part I of 1095-C, you need to enter Applicable Large Employer details from Line 7 to 13.

Line 7

Enter the name of the employer.
Line 8

Enter the Employer Identification Number (EIN).
Line 9

Enter the employer’s street address, including room or suite number.
Line 10

Enter the employer’s contact telephone number.
Line 11

Enter the city or town.
Line 12

Enter the employer’s state or province.
Line 13

Enter the employer’s country and ZIP or foreign postal code.

E-File Form 1095-C Now

3. Part II - Employer Offer of Coverage

In Part II, the employer should enter the health insurance coverage details offered to the employee.

Line 14 (Offer of Coverage)

ACA Codes 1A-1U are used to describe the health insurance coverage offered to your employee.

Codes for Line 14	Code Description
1A	Minimum essential coverage providing minimum value offered to you with an employee required contribution for self-only coverage equal to or less than 9.5% (as adjusted) of the 48 contiguous states single federal poverty line and minimum essential coverage offered to your spouse and dependent(s) (referred to here as a Qualifying Offer). This code may be used to report for specific months for which a Qualifying Offer was made, even if you did not receive a Qualifying Offer for all 12 months of the calendar year. For information on the adjustment of the 9.5%, visit IRS.gov.
1B	Minimum essential coverage providing minimum value offered to you and minimum essential coverage NOT offered to your spouse or dependent(s).
1C	Minimum essential coverage providing minimum value offered to you and minimum essential coverage offered to your dependent(s) but NOT your spouse.
1D	Minimum essential coverage providing minimum value offered to you and minimum essential coverage offered to your spouse but NOT your dependent(s).
1E	Minimum essential coverage providing minimum value offered to you and minimum essential coverage offered to your dependent(s) and spouse.
1F	Minimum essential coverage NOT providing minimum value offered to you, or you and your spouse or dependent(s), or you, your spouse, and dependent(s).
1G	You were NOT a full-time employee for any month of the calendar year but were enrolled in self-insured employer-sponsored coverage for one or more months of the calendar year. This code will be entered in the All 12 Months box or in the separate monthly boxes for all 12 calendar months on line 14.
1H	No offer of coverage (you were NOT offered any health coverage or you were offered coverage that is NOT minimum essential coverage).
1J	Minimum essential coverage providing minimum value offered to you; minimum essential coverage conditionally offered to your spouse; and minimum essential coverage NOT offered to your dependent(s).
1K	Minimum essential coverage providing minimum value offered to you; minimum essential coverage conditionally offered to your spouse; and minimum essential coverage offered to your dependent(s)
1L	Individual coverage health reimbursement arrangement (HRA) offered to you only with affordability determined by using employee’s primary residence location ZIP code.
1M	Individual coverage HRA offered to you and dependent(s) (not spouse) with affordability determined by using employee’s primary residence location ZIP code.
1N	Individual coverage HRA offered to you, spouse and dependent(s) with affordability determined by using employee’s primary residence location ZIP code.
1O	Individual coverage HRA offered to you only using the employee’s primary employment site ZIP code affordability safe harbor.
1P	Individual coverage HRA offered to you and dependent(s) (not spouse) using the employee’s primary employment site ZIP code affordability safe harbor.
1Q	Individual coverage HRA offered to you, spouse and dependent(s) using the employee’s primary employment site ZIP code affordability safe harbor.
1R	Individual coverage HRA that is NOT affordable offered to you; employee and spouse or dependent(s); or employee, spouse, and dependents.
1S	Individual coverage HRA offered to an individual who was not a full-time employee.
1T	The Individual coverage HRA offered to the employee and spouse (no dependents) and affordability was determined using the employee's primary residence location ZIP code.
1U	The Individual coverage HRA offered to the employee and spouse (no dependents) and affordability was determined using the employee's primary employment site ZIP code affordability safe harbor.

Line 15 (Employee Required Contribution)

Enter the Employee Required Contribution. This amount is a monthly cost to the employee for the lowest-cost self-only minimum essential coverage providing the minimum value that you offered your employee. This line should be filled only when the code on line 14 is 1B, 1C, 1D, 1E, 1J, 1K, 1L, 1M, 1N, 1O, 1P, or 1Q.

Line 16 (Section 4980H Safe Harbor and Other Relief)

Enter the code related to Section 4980H Safe Harbor and Other Relief. There are 11 different codes to be entered on this line. Each code defines the type of coverage provided to the employee in the previous year and how the employer meets the employer shared provisions of Section 4980H. The code you enter provides the IRS information to administer the employer shared provisions.

Codes for Line 16	Code Description
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 on line 16 for any month in which the multiemployer interim rule relief applies (enter code 2E). Do not enter code 2C on line 16 if code 1G is entered on line 14. Do not enter code 2C on 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 on line 16 for any month in which the employee enrolled in coverage that was not minimum essential coverage.
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, 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.
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 is offered 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).
2I	Reserved for future use.

Learn more about Form 1095-C Codes

Line 17

Enter the ZIP code that you used to calculate the employee’s affordability. Fill this line only when you have provided individual coverage HRA to the employee.

Contact our sister product ACAwise, an full service end-to-end ACA reporting software, which takes care from generating ACA codes to E-filing forms with IRS and the states. ACAwise also distributes employee copies on your behalf.

Get Started now

4. Part III - Covered Individuals

This section should be completed by the employer if the employee is provided with self-insurance. The details of individuals, including any full-time employee and non-full-time employee, and any employee’s family members enrolled under employer’s health plan should be listed in this section. The details include name, SSN, and DOB. If they are covered for all 12 months, check the box “Covered all 12 months”. If the plan has covered only a few months, check the applicable boxes under Month of coverage.

Note: DOB should be entered only if SSN or other TIN is not available.

Line 18 - 30

Based on the number of individuals covered under the health plan, fill these lines.
- (a) Name of covered individual(s) - Enter the name of the individuals covered under the employer’s health plan.
- (b) SSN or other TIN - Enter the SSN or other TIN of the individuals
- (c) DOB - Enter the individual’s DOB if SSN or other TIN is not available.
- (d) Covered all 12 months - If the health plan is provided for all 12 months, check this box.
- (e) Months of coverage - If the health plan is provided only for a few months in a year, check the applicable boxes.

We hope the given 1095-C instructions will help to complete your tax return easily. If you would like to e-file Form 1095-C for the tax year 2021, you can sign up for TaxBandits at no cost. We are an IRS-certified e-file provider supporting the filing of various tax returns.

Get started with TaxBandits today and stay compliant with the IRS!

E-File Form 1095-C Now