Understanding Form 1095-C Codes for Line 14 and Line 16
Updated on February 09, 2023 - 10:30 am by, TaxBandits
Employers might feel overwhelmed in terms of understanding and completing lines 14-16 of Form 1095-C codes. If you report the incorrect codes on Form 1095-C, it leads employers to pay huge penalties.
To help employers avoid these complications, we created a helpful guide to understanding Line 14 & 16 Codes.
The following are the topics covered under this article:
1. Form 1095-C - An Overview
Form 1095-C is used by ALEs to report information on the health coverage offered to their employees during that calendar year.
If you are an employer, you must include the employees personal details and health coverage details on Line 14, 15, & 16 by using various codes.
Here’s what you need to report in these lines:
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Line 14
Report the type of health coverage plan offered to your employee
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Line 15
Report the amount of the employee required monthly contribution
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Line 16
Report the employees’ eligibility for health coverage and the coverage status for each month of the calendar year
2. Form 1095-C Line 14 - Offer of Coverage
On Line 14, employers should use the 1-Series code (1A-1U) that describes the type of health insurance coverage offered to an employee, spouse and dependents.
The code may vary for each employee based on the following scenarios:
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Whether an individual was offered coverage
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What type of coverage was offered
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Which months that coverage was offered
If an employee is eligible for the health benefits in any month during the year, then line 14 should include a value for each month, even during months where an employee is not/no longer employed.
Here is the list of 1 Series Line 14 codes for Form 1095-C
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Line 14 Codes
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Code Description
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1A
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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.
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1B
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Minimum essential coverage providing minimum value offered to you and minimum essential coverage NOT offered to your spouse or dependent(s).
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1C
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Minimum essential coverage providing minimum value offered to you and minimum essential coverage offered to your dependent(s) but NOT your spouse.
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1D
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Minimum essential coverage providing minimum value offered to you and minimum essential coverage offered to your spouse but NOT your dependent(s).
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1E
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Minimum essential coverage providing minimum value offered to you and minimum essential coverage offered to your dependent(s) and spouse.
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1F
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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).
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1G
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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.
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1H
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No offer of coverage (you were NOT offered any health coverage or you were offered coverage that is NOT minimum essential coverage).
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1J
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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).
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1K
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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).
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1L
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Individual coverage health reimbursement arrangement (HRA) offered to you only with affordability determined by using employee’s primary residence location ZIP code.
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1M
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Individual coverage HRA offered to you and dependent(s) (not spouse) with affordability determined by using the employee's primary residence location ZIP code.
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1N
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Individual coverage HRA offered to you, spouse and dependent(s) with affordability determined by using employee’s primary residence location ZIP code.
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1O
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Individual coverage HRA offered to you only using the employee’s primary employment site ZIP code affordability safe harbor.
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1P
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Individual coverage HRA offered to you and dependent(s) (not spouse) using the employee’s primary employment site ZIP code affordability safe harbor.
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1Q
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Individual coverage HRA offered to you, spouse and dependent(s) using the employee’s primary employment site ZIP code affordability safe harbor.
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1R
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Individual coverage HRA that is NOT affordable offered to you; employee and spouse or dependent(s); or employee, spouse, and dependents.
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1S
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Individual coverage HRA offered to an individual who was not a full-time employee.
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a. 1095-C Codes to enter on Line 14 for meeting the Mandated ICHRA Reporting
Last year, the IRS mandated reporting of ICHRA Coverage and introduced new codes on line 14 for meeting the mandated ICHRA Reporting.
An individual coverage health reimbursement arrangement (ICHRA) is a fairly new type of health reimbursement arrangement introduced in 2020, in which employers of any size can reimburse employees for some or all of the premiums that the employees pay for health insurance that they purchase on their own.
ICHRA health coverage details should be reported through Codes (1T - 1U) on Line 14.
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New ICHRA Codes for Line 14
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Code Description
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1T
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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.
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1U
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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.
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Get Started with TaxBandits to file your Form 1095-C with the required Line 14 & 16 Codes.
TaxBandits, an IRS Authorized E-file Provider, enables you to file your 1095 Forms securely and accurately.
3. Form 1095-C Line 15: Employee Required Contribution
Employers must report the amount of the employee’s required monthly contribution on Line 15.
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 of the lowest-cost, self-only coverage offered to that employee.
4. Form 1095-C Line 16 Codes - Section 4980H Safe Harbor Codes and Other Relief for ALE Members
Line 16 Codes are used to report information about the following information on Form 1095-C
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Whether an individual was offered coverage
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What type of coverage was offered
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Which months that coverage was offered
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Line 16 Codes
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Code Description
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2A
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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.
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2B
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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).
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2C
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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.
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2D
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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).
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2E
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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.
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2F
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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.
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2G
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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).
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2H
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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).
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2I
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Reserved for future use.
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5. Line 17 - ZIP Code (Location of Employer Determined Eligibility)
Last year, the IRS introduced Line 17 for meeting the ICHRA Coverage. Employers must enter the ZIP code of the employee offered ICHRA coverage on Line 17.
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.
Click here to know more about 1095-c instructions.
If you have any queries regarding filing your Form 1095-C, you can contact our support team at support@taxbandits.com. We can help you in choosing the right codes to be entered on your 1095 C.
Get started with TaxBandits to e-file your IRS Form 1095-C and stay compliant with the IRS!!
