1094 and 1095 Forms: What Employers Need to Know This Tax Season

Tax season brings a familiar set of obligations for employers — W-2s, payroll reconciliation, year-end compliance reporting. But if you sponsor a group health plan, there's another filing requirement that can't be overlooked: Forms 1094 and 1095.

These forms are part of the Affordable Care Act's reporting requirements, and the filing obligations extend beyond just large employers. Depending on your plan type and size, you may be required to file — and missing the deadline or filing incorrect information can result in IRS penalties that add up quickly.

Here's what employers need to know to stay compliant.

What Are Forms 1094 and 1095?

There are two sets of forms under ACA reporting, and which ones you file depends on your employer size and plan type:

Forms 1095-B and 1094-B are filed to report that individuals had minimum essential coverage during the year. For small group fully insured plans, the insurance carrier handles this filing. For self-funded and level-funded plans, the filing responsibility varies: some level-funded carriers handle this filing on behalf of small groups, while others require the employer to file.

Forms 1095-C and 1094-C are filed by applicable large employers (ALEs) — those with 50 or more full-time equivalent employees — to report whether they offered coverage to full-time employees, whether that coverage was affordable under ACA standards, and the months during which coverage was available. Large employers are responsible for filing these forms regardless of whether their plan is fully insured or self-funded.

Form 1095 is the individual statement provided to employees or covered individuals. Form 1094 is the transmittal form filed with the IRS that summarizes the information from all of your 1095 forms.

Who Needs to File?

This is where it gets more nuanced than many employers realize.

Large employers (50+ FTEs) must file Forms 1094-C and 1095-C regardless of whether their plan is fully insured or self-funded. This is to demonstrate compliance with the ACA's employer mandate.

Small employers with fully insured plans do not file. The insurance carrier files Forms 1094-B and 1095-B on behalf of covered individuals.

Small employers with self-funded or level-funded plans may need to file Forms 1094-B and 1095-B even if they have fewer than 50 employees. With level-funded plans, some carriers handle this filing on behalf of small groups, while others do not — making the employer responsible for reporting coverage.

Employers offering ICHRAs (Individual Coverage Health Reimbursement Arrangements) also have reporting obligations. Large employers offering ICHRAs file Forms 1094-C and 1095-C. Small employers offering ICHRAs may have reporting obligations depending on how the ICHRA is structured.

The key takeaway: if you're a large employer or if you have a self-funded or level-funded plan, you likely have a filing obligation. If you're unsure, check with your tax preparer, accountant, carrier, or TPA, as they may be handling this filing on your behalf or can clarify your specific obligation.

Key Deadlines for 2026 Filing (2025 Tax Year)

March 3, 2026 — Deadline to provide Form 1095-B or 1095-C to employees and covered individuals

March 31, 2026 — Deadline to file Forms 1094-B/1095-B or 1094-C/1095-C with the IRS electronically (required for employers filing 10 or more forms)

February 28, 2026 — Deadline if filing fewer than 10 forms by paper (paper filing is rare and generally not recommended)

Missing these deadlines can result in IRS penalties. The penalty amounts are adjusted annually for inflation, so verify current penalty rates with your tax professional or on IRS.gov before filing.

Common Mistakes That Trigger Penalties

Even employers who file on time can face penalties if the information reported is incorrect or incomplete. Here are the most common errors:

Not realizing they have to file at all. Small employers with level-funded plans often assume their carrier or TPA is handling ACA reporting. In many cases, they're not. The employer is the plan sponsor and is responsible for filing unless the carrier explicitly handles it. Your tax preparer may also handle this, but don't assume — verify who is responsible.

Incorrect affordability calculations. For large employers, the ACA requires that the employee's share of the lowest-cost self-only coverage not exceed 9.02% of household income for 2025 coverage (the amount reported in 2026). Many employers use a safe harbor method to determine affordability, but applying the wrong safe harbor — or miscalculating employee wages — can result in noncompliance.

Missing or incorrect employee information. Social Security numbers, dates of birth, and coverage months must be reported accurately. Small data errors can lead to IRS notices and correction requirements.

Failure to code offer of coverage correctly. Form 1095-C uses a series of codes to indicate whether coverage was offered, what type of coverage was available, and why an employee may not have been offered coverage. Using the wrong code — especially for employees in waiting periods, on leave, or in variable-hour positions — creates compliance risk.

Not accounting for employees or dependents who terminated mid-year. Coverage status changes when employees leave or dependents lose eligibility, and those changes must be reflected accurately on the forms.

Assuming the carrier, TPA, or accountant is filing on your behalf. With level-funded and self-funded plans, the employer is often responsible for ACA reporting. Some carriers, TPAs, and accounting firms offer this as a service, but it's not automatic. Verify who is responsible before the deadline.

What Employers Should Do Now

If you haven't started preparing your ACA reporting, now is the time.

Determine your filing obligation. Are you a large employer (50+ FTEs)? Do you have a self-funded or level-funded plan? Do you offer an ICHRA? If the answer to any of these is yes, you likely need to file. Check with your tax professional, carrier, or TPA if you're unsure.

Verify your large employer status (if applicable). Confirm whether you met the 50 full-time equivalent employee threshold during 2025. This determines whether you file 1094-C/1095-C or 1094-B/1095-B.

Review employee classifications. Make sure full-time and part-time employees were classified correctly throughout the year, especially if you have variable-hour or seasonal employees.

Confirm affordability calculations (if applicable). If you're subject to the employer mandate and using a safe harbor method (federal poverty level, rate of pay, or W-2), ensure it was applied consistently and correctly for the entire year.

Audit your data before filing. Check that employee and dependent information — names, Social Security numbers, months of coverage — is accurate. Errors discovered after filing require amended submissions.

Clarify responsibilities with your carrier, TPA, benefits administrator, or tax preparer. Don't assume someone else is handling it. Get written confirmation of who is responsible for filing, and review the output before submission if a third party is preparing the forms on your behalf.

What Happens If You Don't File — Or File Incorrectly?

The IRS takes ACA reporting seriously. Employers who fail to file, file late, or submit inaccurate forms face penalties that scale based on the severity and timing of the violation. Penalty amounts are adjusted annually for inflation and vary depending on when the failure is corrected.

Even if penalties aren't assessed immediately, incorrect filings can trigger IRS inquiries, which require time and resources to resolve. Employers may be asked to provide documentation proving that coverage was offered and affordable — months or even years after the fact.

The Bottom Line

Forms 1094 and 1095 aren't optional, and they aren't something to handle at the last minute. Large employers and employers with self-funded or level-funded plans need to treat these filings with the same level of attention they give to payroll tax reporting.

If you're unsure whether your organization is required to file, or if you've never had your ACA reporting process audited, this is a good time to take a closer look. Talk to your tax preparer, benefits advisor, carrier, or TPA to confirm who is responsible and ensure the filing is done correctly. The cost of getting it wrong is significantly higher than the cost of getting it right.