ACA Forms Codes for Form 1095-C : Line 14, Line 15 & Line 16 Explained
Understand each ACA code, avoid filing errors, and stay IRS-compliant.
Form 1095-C is used by Applicable Large Employers (ALEs) to report health coverage offers made to full-time employees under the Affordable Care Act (ACA). A critical part of this form is the use of IRS-defined codes on Line 14, Line 15, and Line 16.
This guide breaks down ACA Form 1095-C codes, explaining what each code means, when to use it, and how to avoid common reporting mistakes—so you can file accurately and stay IRS-compliant with confidence.
Table of Contents
What is ACA Form 1095-C Codes?
The IRS uses these codes to determine:
- Employer Shared Responsibility compliance
- Whether coverage was affordable and met ACA standards
- Whether an employer may owe penalties under IRC Section 4980H
Understanding Lines 14, 15 and 16
1095-C form is essential for ACA reporting, but the IRS codes on Lines 14, 15, and 16 are the most critical areas that determine compliance.
Here’s what each line captures and why it matters:
| Lines | What it shows | Why it’s Important |
|---|---|---|
| Line 14 | The type of health coverage offered to the employee, spouse, and dependents | Shows whether coverage meets ACA minimum value and affordability standards. |
| Line 15 | Line 15 The employee’s required monthly contribution for the lowest-cost, self-only coverage that provides minimum value | Helps the IRS determine if coverage is affordable and meets ACA requirements |
| Line 16 | Safe harbors or reasons why the employer may not owe a penalty | Protects the employer from potential ACA penalties under IRC Section 4980H |
Stay IRS-compliant by filing Form 1095-C correctly and completing
secure e-filing without errors or penalties!
Line 14 Codes – Coverage Offer Details
Line 14 of 1095 c form reports on the type of health coverage offered to an employee for each month of the calendar year. These codes tell the IRS whether coverage was offered, who it was offered to, and whether the offer meets ACA minimum value standards.
| Code | Meaning | When to use |
|---|---|---|
| 1A | Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time employee with Employee Required Contribution equal to or less than 9.5% (as adjusted) of mainland single federal poverty line and at least minimum essential coverage offered to spouse and dependent(s) | Use when the coverage meets affordability thresholds and includes all eligible family members |
| 1B | Minimum essential coverage (MEC), minimum value offered to employee only. | Use when only employee is offered Minimum Value coverage. |
| 1C | Minimum essential coverage, minimum value offered to employee and dependents (not spouse). | Use when employee and dependents are offered Minimum Value coverage. |
| 1D | Minimum essential coverage, minimum value offered to employee and spouse (not dependents) | Use when employee and spouse are offered Minimum Value coverage (no conditional offers) |
| 1E | Minimum essential coverage, minimum value offered to employee, spouse, and dependents | Use when all family coverage is offered with minimum value. |
| 1F | Minimum essential coverage offered that does NOT provide minimum value. | Use when coverage offered doesn’t meet minimum value requirements. |
| 1G | Offer of coverage for an individual who was not an employee for any month or was not full-time for any month and enrolled in self-insured coverage. | Use when non-employee or non-full-time individual enrolled in self-insured plan. |
| 1H | No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage, which may include 1 or more months in which the individual was not an employee) | Use when no MEC was offered for the month. |
| 1J | Minimum essential coverage for the minimum value offered to employee and dependents; conditional offer to spouse | Use for conditional spouse offers |
| 1K | Minimum essential coverage minimum value offered to employee, spouse, and dependents, with conditional offer to spouse | Use when spouse coverage is conditional |
Line 14 Codes for ICHRA Reporting
To support Individual Coverage Health Reimbursement Arrangements (ICHRA) reporting, the IRS introduced new ACA codes on Line 14 of form 1095-c. These codes help the IRS verify whether employers are meeting ACA coverage and affordability requirements when offering ICHRAs.
What is an ICHRA?
An ICHRA is a health reimbursement arrangement introduced in 2020 that allows employers of any size to reimburse employees for all or part of the cost of individual health insurance premiums. This approach gives employers more flexibility in designing benefits while allowing employees to choose coverage that best fits their needs.
| Code | Meaning | When to use |
|---|---|---|
| 1L | Individual coverage HRA offered to employee only with affordability determined by using employee’s primary residence location ZIP code. | Use for certain HRA coverage offers. |
| 1M | Individual coverage HRA offered to employee and dependent(s) (not spouse) with affordability determined by using employee’s primary residence location ZIP code. | Use for HRA coverage to employee + dependents |
| 1N | Individual coverage HRA offered to employee, spouse, and dependent(s) with affordability determined by using employee’s primary residence location ZIP code. | Use for full family HRA coverage |
| 1O | Individual coverage HRA offered to employees only using the employee’s primary employment site ZIP code affordability safe harbor. | Use when affordability is based on work location |
| 1P | Individual coverage HRA offered to employee and dependent(s) (not spouse) using the employee’s primary employment site ZIP code affordability safe harbor. | Use when affordability is based on work location |
| 1Q | Individual coverage HRA offered to employee, spouse, and dependent(s) using employee’s primary employment site ZIP code affordability safe harbor | Use when affordability is based on work location |
| 1R | Individual Coverage HRA offered that is NOT affordable employee and spouse, or dependent(s); or employee, spouse, and dependents | Use when HRA does not meet affordability requirements |
| 1S | Individual coverage HRA offered to an individual who was not a full-time employee. | Use on Line 14 when a full-time employee is offered an employee-only ICHRA and the employer determines affordability based on the worksite location |
| 1T | Individual coverage HRA offered to employee and spouse (not dependents) with affordability determined using employee’s primary residence location ZIP code | Use this code on Line 14 of Form 1095-c when a full-time employee is offered an ICHRA that covers the employee and spouse only, and the employer uses the employee’s residence location to determine affordability for ACA reporting |
| 1U | Individual coverage HRA offered to employee and spouse (not dependents) using employee’s primary employment site ZIP code affordability safe harbor. | Use this code on Line 14 of Form 1095 C when a full-time employee is offered an ICHRA covering the employee and spouse only, and the employer uses the worksite (employment location) to determine affordability for ACA reporting. |
Line 15- Employee Required Condition
Line 15 of form 1095 c reports the employee’s required contribution for the lowest-cost, self-only coverage that meets minimum value standards.
Critical Reporting Rule
Even if an employee enrolled in a different plan, chose family coverage, or declined coverage altogether, Line 15 must always reflect the self-only rate of the most affordable ACA-compliant plan offered.
| What to Report | How to Apply It |
|---|---|
| Dollar amount (for example, $102.34) | Report the monthly cost of the lowest-cost self-only plan that meets minimum value requirements |
| Lowest-cost self-only coverage | Do not report family, spouse, or dependent coverage costs |
| Leave blank if Line 14 = 1A or 1G | If Line 14 uses code 1A (qualifying offer) or 1G, Line 15 should be left blank |
| Monthly amount only | Always report a monthly premium, not an annual total. If the employee’s contribution is zero, enter 0.00. |
| Monthly or All 12 Months | Enter amounts by month or use the “All 12 Months” row if the cost stayed the same all year. If the amount changed, enter the correct premium for each applicable month. |
Line 15 works together with Line 14 and Line 16 to determine whether an employer may be subject to ACA penalties under IRC Section 4980H. Accurate reporting helps demonstrate affordability and prevents IRS penalty notices or correction requests.
Line 16 Codes- Safe Harbor & Other Relief for ALE Members
Line 16 explains why an employer may not owe an ACA penaltyfor a specific month. Enter one applicable Code Series 2 code per month. If the same code applies all year, you can use the “All 12 Months” box. If no code applies, leave the month blank.
| Code | Meaning | When to use |
|---|---|---|
| 2A | Employee not employed during the month | Use for months the employee was not employed (new hire before start date, terminated employee, or not employed at any time during the month) |
| 2B | Employee not a full-time employee | Use when the employee did not average 30 hours per week or was in a limited non-assessment period (such as a waiting period) |
| 2C | Employee enrolled in health coverage offered | Use when the employee enrolled in the employer’s coverage, regardless of affordability |
| 2D | Employee in a section 4980H(b) Limited Non-Assessment Period | Use during waiting periods, initial measurement periods, or first month of employment when the employee isn’t yet required to be offered coverage. |
| 2E | Multiemployer interim rule relief. | Use if coverage is offered through a multiemployer plan, and the employer qualifies for relief. |
| 2F | Section 4980H affordability W2 form safe harbor | Use when coverage is considered affordable based on the employees W2 wages. |
| 2G | Section 4980H affordability federal poverty line safe harbor. | Use when affordability is based on the Federal Poverty Line |
| 2H | Section 4980H affordability rate of pay safe harbor. | Use when affordability is calculated using the employee’s rate of pay |
Line 17- ZIP Code used for ICHRA Affordability
Line 17 on 1095-C Form is used only for Individual Coverage HRA (ICHRA) reporting. When an Applicable Large Employer offers an ICHRA and reports that offer using ICHRA-specific codes on Line 14 (such as 1L–1U), Line 17 requires the employer to enter the ZIP code that was used to determine affordability.
ZIP Code Requirements
Line 17 reports the ZIP code used to determine ICHRA affordability. This ZIP code identifies the lowest-cost silver plan in the Health Insurance Marketplace and supports the employee's required contribution shown on Line 15. Depending on the Line 14 code, the ZIP code will be either the employee's home ZIP code or the primary work location ZIP code if the employer uses the work location safe harbor.
👉To know more visit our 1095-C form instructions
Common Form 1095-C Coding Mistakes
Avoid These Common Errors
- Using an incorrect Line 14 code, such as reporting Code 1A for an ICHRA offer instead of the required ICHRA-specific codes.
- Entering an amount on Line 15 when it should be left blank, especially when Line 14 is coded as 1H or 1A.
- Reporting the wrong premium on Line 15, including family coverage costs or an annual total instead of the lowest-cost self-only monthly premium.
- Selecting Line 14 and Line 16 codes that don’t align, which can cause affordability and penalty determination issues.
- Entering the wrong ZIP code on Line 17 for ICHRA reporting by mixing up the employee’s home ZIP code and work location ZIP code.
- Using the same code for all 12 months if the employee's status or coverage changes at any time during the year.
- Failure to update codes due to mid-year hires, terminations, or changes in coverage that result in incorrect monthly reporting.
Common Employer Scenarios (How to Code them on 1095-c form)
Filing Form 1095-C correctly depends on the employee’s coverage situation. Here are common scenarios and the appropriate Line 14–16 codes to use:
| Scenario | Line 14 Code | Line 15 | Line 16 Code |
|---|---|---|---|
| Employee offered minimum value coverage for self, spouse, and dependents | 1E | Dollar amount (e.g., $135.00) | 2F, 2G or 2H |
| Employee offered coverage for self only | 1B | Enter monthly self-only premium | 2F, 2G or 2H |
| Employee not offered any coverage | 1H | Leave blank | 2A or 2B |
| Employee offered ICHRA for self and spouse (home ZIP affordability) | 1T | Dollar amount based on Zip-based calculations | 2F, 2G or 2H |
| Employee offered ICHRA for self and spouse (worksite ZIP affordability) | 1U | Dollar amount based on worksite ZIP | 2F, 2G or 2H |
| Employee enrolled in employer coverage | 1C / 1D / 1E | Enter monthly self-only premium | 2C |
| Employee enrolled in ICHRA | 1L, 1M, 1N, 1O, 1P, 1Q, 1S, 1T, or 1U (ICHRA-specific codes) * | Required | 2C (if enrolled) or 2H (safe harbor) |
| Employee in waiting period or not full-time | 1A, 1G and 1H | Leave 15 blank | 2D or 2B |
How TaxZerone Simplifies ACA Code Reporting?
TaxZerone's ACA filing solution is designed to take the confusion out of ACA code reporting and help employers stay compliant with IRS requirements. It does this by
- IRS-compliant code guidance: TaxZerone gives IRS-compliant code guidance that aids users in selecting the right ACA codes by analyzing their coverage details and employee information.
- Flagging potential errors before filing: The system identifies all missing, invalid and conflicting codes through its built-in checks which enable users to correct problems before they submit their work to the IRS thus preventing approval problems
- Generating employee copies accurately: The system gives correct employee statements through its automated process, which ensures that all necessary details get reported.
- Ensuring secure electronic submission: The TaxZerone system enables secure electronic filing through its e-filing process which protects sensitive information while creating confirmation documents that show when the IRS filing ends.
- Delivered by ZeroneVault: Employee copies of 1095 C form are securely delivered through ZeroneVault, allowing employees to access their forms online anytime. Employers also have the option to send employee copies via postal mailing, ensuring timely and compliant distribution.
