IRS Form 1095-C: how to code lines 14, 15, and 16 correctly

Executive overview

Employers with 50+ full-time employees must file 1095-C forms proving they offered ACA-compliant coverage. Getting the codes on lines 14–16 wrong triggers IRS penalty risk.

Each line plays a distinct role: what you offered, what it cost, and why any gap was acceptable. Miss line 16 and the IRS assumes you failed.

Correct code combinations across lines 14–16 are your legal defence against ACA penalties.

The ACA employer mandate

• Coverage must meet three criteria: minimum essential coverage (MEC), affordability, and minimum value.
• MEC = a plan covering preventative care, outpatient, and hospital services — not a guarantee of affordability.
• Affordability = employee's share of the lowest-cost self-only premium cannot exceed a set percentage of household income (threshold changes annually).
• Minimum value = plan covers at least 60% of expected medical costs; employees cover the remaining ~40%.
• All three criteria must be met to satisfy the mandate.

Line 14 — what you offered

• Tells the IRS whether suitable coverage was offered each month.
• 1A: affordable minimum value coverage offered to employee, spouse, and dependents — the fast-lane code.
• 1E: also signals suitable coverage offered to everyone; similar to 1A with minor nuance.
• 1H: no offer of coverage made for that month.

Line 15 — what it cost

• Records the employee's share of the cheapest self-only plan available that month.
• Use the lowest-cost single plan, regardless of what the employee actually enrolled in.

Line 16 — context and defence

• Explains enrollment status and justifies any coverage gap.
• 2A: employee was not employed that month.
• 2B: employee was part-time or terminated mid-month.
• 2C: employee was enrolled in coverage — the most favourable code.
• 2D: employee was in a limited non-assessment period (e.g. initial waiting period after hire).
• 2H: employee did not enroll, but affordability was determined using the rate-of-pay safe harbour.
• Leaving line 16 blank signals to the IRS that you failed ACA reporting — always complete it.