Under the Affordable Care Act, most employers with more than 50 full-time equivalent employees are required to file certain documents with the IRS to demonstrate that they offered minimum essential coverage to their full-time employees. Employers were required to first report this information for 2015. Employees receive copies of Forms 1095-B and 1095-C to keep in their records. In most cases, no action is required from you, but the forms may be useful in preparing your taxes.

Form 1095-B is sent to you directly from your insurer, and it informs the IRS that you were enrolled in minimum essential coverage in the previous year. The form details the type of coverage, the months of the year during which coverage was maintained, and the names of those covered by the plan.

In addition, your employer may send you a Form 1095-C if you are an employee at a company with more than 50 full-time employees. This form states that your employer offered you health insurance coverage and in some cases indicates whether you enrolled in it. You’ll receive a copy of this form in either case.

The key pieces of information on your 1095-C will be on lines 14 to 16. The following glossary and definitions should help you understand the codes you will find on those lines.

Line 14 — offer of coverage

Line 14 indicator codes specify the type of coverage, if any, offered to an employee, the employee’s spouse, and the employee’s dependents.

  • 1A – Qualifying Offer: For 2017, minimum essential coverage providing minimum value offered to full-time employee with employee contribution for self-only coverage equal to or less than 9.69% mainland single federal poverty line and at least minimum essential coverage offered to spouse and dependent(s).
  • 1B – Minimum essential coverage providing minimum value offered to employee only.
  • 1C – Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse).
  • 1D – Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)).
  • 1E – Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse.
  • 1F – Minimum essential coverage NOT providing minimum value offered to employee; employee and spouse or dependent(s); or employee, spouse and dependents.
  • 1G – Offer of coverage to employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in self-insured coverage for one or more months of the calendar year.
  • 1H – No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage, which may include one or more months in which the individual was not an employee).

Line 15 – lowest cost monthly premium for self-only coverage providing minimum value

For line 15, employers must include the amount of an employee’s required contribution. Employers enter the lowest-cost monthly premium for self-only minimum essential coverage providing minimum value that is offered to the employee. This amount may not be the amount the employee is paying for the coverage, for example, if the employee chose to enroll in more expensive coverage such as family coverage. Line 15 is only populated if line 14 reads as 1B, 1C, 1D, or 1E.

Line 16 — employment status / safe harbors

Line 16 indicator codes are used to report for the months of the calendar year that one of the following situations applied to the employee: (a) the employee was not employed or was not a full-time employee (Code 2A or 2B, respectively); (b) the employee enrolled in the minimum essential coverage offered (Code 2C); (c) the employee was in a Limited Non-Assessment Period with respect to section 4980H(b) (Code 2D); (d) the employer met one of the section 4980H affordability safe harbors with respect to this employee (Code 2F-2H); (e) or the employer was eligible for multi-employer interim rule relief for this employee (Code 2E).

In some circumstances, more than one situation could apply to the same employee in the same month. For example, an employee could be enrolled in health coverage for a particular month during which he or she is not a full-time employee. However, only one code may be used for a particular calendar month.

  • 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 employer on any day of the calendar month. Do not use code 2A for the month during which an employee terminates employment with the employer.
  • 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 coverage offered. Enter code 2C for any month in which the employee enrolled in health coverage offered by the employer for each day of the month, regardless of whether any other code in Code Series 2 (other than code 2E) might also apply (for example, the code for a section 4980H affordability safe harbor). Do not enter 2C in line 16 if code 1G is entered in the All 12 Months Box in line 14 because the employee was not a full-time employee for any months of the calendar year. Do not enter code 2C in line 16 for any month in which a terminated employee is enrolled in COBRA continuation coverage (enter code 2A).
  • 2D – Employee in a section 4980H(b) Limited Non-Assessment Period. Enter code 2D for any month during which an employee is in a Limited Non-Assessment Period for section 4980H(b). 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 employer is also eligible for the multi-employer interim rule relief for the month, enter code 2E (multi-employer interim rule relief) and not code 2D (employee in a Limited Non-Assessment Period).
  • 2E – Multi-employer interim rule relief. Enter code 2E for any month for which the multi-employer 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 employer 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 employer 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 employer 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 employer 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).

Disclaimer

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.

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