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IRS Form 1095-C (2025) – Applicable Large Employers (ALEs) must comply with Affordable Care Act (ACA) reporting for calendar year 2025. Form 1095-C plays a central role in this process. Employers and employees alike need to understand its requirements, purpose, and mechanics as the March 2026 deadlines approach.
This comprehensive guide draws directly from official IRS resources, including the 2025 Instructions for Forms 1094-C and 1095-C and the form itself. It covers everything you need to know for accurate compliance.
What is IRS Form 1095-C?
Form 1095-C, titled Employer-Provided Health Insurance Offer and Coverage, is an information return that Applicable Large Employers (ALEs) use to report:
- Offers of health coverage to full-time employees.
- (For self-insured plans) Actual enrollment in minimum essential coverage (MEC) for employees and their family members.
Employers file it with the IRS along with transmittal Form 1094-C. They also furnish a copy (or equivalent information) to full-time employees.
The form helps the IRS:
- Determine whether an ALE owes an employer shared responsibility payment under IRC Section 4980H.
- Assess employees’ eligibility for the premium tax credit (PTC) when they file their individual tax returns (via Form 8962).
Employees receive the form to verify coverage offers when claiming tax credits or reconciling Marketplace coverage. It is not attached to any tax return — keep it for your records.
Current revision (2025): The form and instructions were finalized and posted by the IRS in late 2025.
Who Must File Form 1095-C? (Requirements for ALEs)
You must file if your organization qualifies as an Applicable Large Employer (ALE) or ALE Member.
Definition of ALE:
- An employer that employed an average of 50 or more full-time employees (including full-time equivalents) on business days during the preceding calendar year (2024 for 2025 reporting).
- Aggregation rules apply: Treat all members of an Aggregated ALE Group (common ownership/control) as a single employer for the 50-employee threshold.
- Each ALE Member files separately using its own EIN.
Filing triggers:
- One Form 1095-C for each full-time employee (30+ hours/week on average) who worked one or more months in 2025.
- For self-insured health plans: Also report enrolled individuals (including non-full-time employees, spouses, and dependents) in Part III.
- Report data for all 12 months of the calendar year, even if the employee was full-time for only part of the year.
Exceptions:
- Employers with fewer than 50 full-time employees generally do not file (they may use Forms 1094-B/1095-B for self-insured coverage).
- Governmental units may designate a Designated Governmental Entity (DGE) to file on their behalf.
The Meaning and Purpose of Form 1095-C
Form 1095-C bridges employer reporting under ACA Sections 6055 and 6056 with individual tax benefits.
- For employers: Demonstrates compliance with the employer mandate (offering affordable minimum-value coverage to 95%+ of full-time employees to avoid penalties).
- For employees: Shows what coverage was offered (Part II) and, if self-insured, what was provided (Part III). Use it to:
- Confirm ineligibility for PTC if affordable employer coverage was available.
- Reconcile with Form 1095-A (Marketplace) on your tax return.
The form uses standardized offer codes and safe harbor codes to communicate monthly details efficiently.
2025 Deadlines: Filing, Furnishing & Extensions
For 2025 calendar year reporting (due in 2026):
| Action | Deadline | Notes |
|---|---|---|
| Furnish to full-time employees | March 2, 2026 | Automatic extension from Jan. 31 |
| Paper filing with IRS | March 2, 2026 | Next business day if weekend/holiday |
| Electronic filing with IRS | March 31, 2026 | Required if filing 10+ information returns total |
| Alternative furnishing notice | March 2, 2026 | Website notice (see below) |
- Extensions: Automatic 30-day extension for filing via Form 8809. No automatic extension beyond March 2 for furnishing.
- Electronic filing: Mandatory for 10+ returns (aggregated across all 109x forms). Use the ACA Information Return (AIR) system.
Penalties (2025 amounts): $340 per incorrect return or statement (up to $4,098,500 annual max). Reasonable cause waivers available.
What’s New for 2025? Simplified Furnishing Method
A major relief for employers in 2025:
Alternative Manner of Furnishing (expanded via IRS guidance and instructions):
- Employers no longer need to automatically mail or deliver Form 1095-C to every full-time employee.
- Instead, post a clear, conspicuous, accessible notice on your website by March 2, 2026 (retain until Oct. 15, 2026).
- The notice must include contact methods (email, phone, address) and explain how to request a copy.
- Provide the form (or statement) within 30 days of request — no later than the later of Jan. 31, 2026, or 30 days after the request.
This applies to full-time employees and (for self-insured) other covered individuals. It significantly reduces mailing costs and administrative burden while maintaining compliance.
Qualifying Offer Method alternative also remains available for specific full-time employees.
Other 2025 notes:
- Updated affordability percentage for Qualifying Offers and safe harbors.
- Required “Plan Start Month” field on the form.
- Clarified rules for individual coverage HRAs (ICHRA) with ZIP-code-based affordability.
How Form 1095-C Works? Part-by-Part Breakdown
Part I – Employee & Employer Information
- Employee name, SSN (full to IRS; last 4 digits OK on furnished copy), address.
- Employer (ALE Member) name, EIN, contact phone, address.
Part II – Employee Offer of Coverage (the core of employer mandate reporting)
- Line 14: Monthly offer code (or “All 12 Months” if uniform).
- Common codes: 1A (Qualifying Offer), 1B (employee only), 1E (employee + spouse + dependents), 1H (no offer), 1L–1U (ICHRA variants).
- Line 15: Employee’s required contribution for lowest-cost self-only minimum-value coverage (monthly $ amount).
- Line 16: Safe harbor/relief code (e.g., 2F W-2 safe harbor, 2G federal poverty line).
- Line 17: ZIP code for ICHRA affordability determinations.
Part III – Covered Individuals (self-insured plans only)
- Lists each enrolled person (employee, spouse, dependents) with name, SSN/DOB, and months of coverage.
- Required even for non-full-time enrollees.
Employers must maintain accurate monthly tracking of hours, offers, and enrollment throughout the year.
Common Questions About Form 1095-C (2025)
Do I need to send Form 1095-C if I offered no coverage?
Yes — use code 1H.
What if an employee worked for multiple ALE Members in an aggregated group?
Generally, the member with the most hours reports; special rules apply for different months.
Can I use a substitute form?
Yes, if it meets Pub. 5223 specifications.
Do former employees or retirees get a form?
Only if they were full-time for any month in 2025.
Final Tips for Compliance
- Start data collection now (or review your 2025 records immediately).
- Consider the new website-notice alternative to simplify distribution.
- Use IRS-approved software or a trusted third-party provider for e-filing and code accuracy.
- Retain records for at least 3–6 years.
For the official forms and instructions, visit:
Stay compliant and avoid penalties by acting before the March 2026 deadlines. Consult a tax professional or benefits advisor for your specific situation.
Last updated: February 2026. All information sourced directly from IRS.gov publications.