| Line 14 Description | Line 14 Code | Line 15 | Line 16 Description & Code | |
| Employer offers at least Minimum Value Plan* (MVP) coverage to the employee, spouse and children, and, the employee-only cost1 for the least expensive plan that is MEC* and MVP is less than or equal to 9.78% (9.83% for 2021) of Federal Poverty Level (“FPL”). | 1A | Leave Blank | Employee elects the benefit1 | 2C |
| Employee rejects the benefit1 | 2G | |||
| Employer offers at least MVP coverage to the employee, spouse and children, and, the employer is NOT using the (FPL) Affordability safe harbor to determine Affordability. | 1E | Enter Employee Cost2 | Employee elects the benefit | 2C |
| Employee rejects the benefit | 2F or 2H or Leave Blank3 | |||
| Employee was not offered MEC by the employer during any day in the month, i.e., commonly used for months prior to the employee’s hire date and/or after termination of employment. | 1H | Blank | Employee is not employed for any day in the month | 2A |
| Employee was in his/her waiting period or in a look-back measurement period or administrative period before benefit coverage is offered. | 1H | Blank | Employee is on a waiting period, a look-back measurement period or an administrative period | 2D |
| Employer does not offer coverage to a full-time employee. | 1H | Blank | No other lines are completed as the employer cannot use any other codes for line 16 | Blank |
| Employee/individual is covered under a self-funded medical plan as a part-time employee, COBRA beneficiary, a non- employee (partner) or a retiree for the entire calendar year. | 1G | Blank | Blank | |
| Employee is offered MVP coverage; dependent is not offered at least MEC. Employee’s spouse is offered on a “conditional” basis, at least MEC. | 1J | Enter Employee Cost2 | 2C or Blank | |
| Employee is offered MVP coverage; dependent is offered coverage that is at least MEC and spouse is offered on a “conditional” basis at least MEC. | 1K | Enter Employee Cost2 | 2C or 2F/2G/2H | |
| Only the Employee is offered MEC that is MVP, no coverage extended to spouse or dependent children. | 1B | Enter Employee Cost2 | Enter appropriate Code 2F, 2H or 2G if employee waives, or 2C if employee enrolls in plan | 2C or 2F/2G/2H |
| Employer only offers MEC that is not MVP. | 1F | Enter Employee Cost1 | If the employee waives MEC coverage leave blank; enter Code 2C if enrolls | Blank or 2C |
*MVP = Minimum Value Plan – Bronze Level, 60% actuarial value
*MEC = Minimum Essential Coverage – Employer-sponsored health coverage; may or may not meet the MVP parameters
- It appears that Line 16 could be left blank if Code 1A is used in Line 14. However, the IRS has issued potential penalty letters when Line 16 was blank in that scenario, even though no penalty is due. Therefore, employers should consider filling in the appropriate 2 code in Line 16.
- Employee cost is the lesser of:
- The employee-only monthly deduction for the least expensive plan that is MEC and MVP coverage plus any amount the employee may receive in cash
under an Internal Revenue Code Section 125 plan for rejecting coverage unless this is a ‘Conditional’ opt-out (“cash-out”) Plan, or
- If no “cash-out” option offered, the total employee monthly premium for the least expensive plan that is MEC and MVP.
- 2F if using the Form W-2 method to determine if coverage is affordable or 2H if using the rate of pay method. Leave blank if the employee’s cost is more than 9.78% (9.83% in 2021) of his/her monthly earnings.
- Affordability can be determined using one of the safe harbors: Form W-2, Box 1 wages; FPL; or rate of pay.
Offer of Coverage or Series 1 Indicator Codes:
Form 1095-C Employee Statement Line 14
| Code/Line 14 | What it means |
| 1A | Qualifying Offer (QO): Minimum Essential Coverage (MEC) providing MV offered to full-time (“FT”) employee with employee contribution for self-only coverage equal to or less than 9.78% (9.83% for 2021) of the mainland single FPL and at least MEC offered to spouse and dependent(s). |
| 1B | MEC providing MV offered to employee only. |
| 1C | MEC providing MV offered to employee and at least MEC offered to dependent(s) (not spouse). |
| 1D | MEC providing MV offered to employee and at least MEC offered to spouse (not dependent(s)). Do not use if the offer to the spouse is conditional.1 |
| 1E | MEC providing MV offered to employee and at least MEC offered to dependent(s) and spouse. Do not use if the offer to the spouse is conditional.1 |
| 1F | MEC NOT providing MV offered to employee; employee and spouse or dependent(s); or employee, spouse and dependents. |
| 1G | Offer of coverage to employee who was not a FT 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-funded coverage for one or more months of the calendar year. Can only be used for all 12 months. |
| 1H* | No offer of coverage (employee not offered any health coverage or employee offered coverage that is not MEC, which may include one or more months in which the individual was not an employee). |
| 1I | Not effective for 2016 (and beyond) Form 1095-C filings. |
| 1J | Employer offers MEC providing MV offered to the employee and at least MEC offered conditionally¹ to his/her spouse; MEC not offered to dependent(s). |
| 1K | Employer offers MEC providing MV offered to the employee and at least MEC offered conditionally to his/her spouse; at least MEC offered to dependent(s). |
The 2020 forms include eight new series 1 codes (1L through 1S), which describe whether the ICHRA was also offered to the employee only or also the spouse and dependents. The codes also describe whether the employer used the employee’s primary residence or primary employment site to determine affordability.
MV = Minimum Value – Bronze Level, 60% actuarial value of the total cost of coverage
MEC = Minimum Essential Coverage – Employer-sponsored health coverage; may or may not meet the parameters for MV
*Employee is either: in an initial measurement period, a waiting period, employed in January – March of the year following the year in which the employer reaches 50+ FT and FT equivalent employees, three months after variable-hour employee is promoted to FT status during the first year of employment, or in the first month of employment.
¹A “conditional” offer of coverage to an employee’s spouse is defined as an offer under which the employee and/or spouse must meet or not meet one or more criterion (e.g., the employee’s spouse may enroll only if said spouse is not eligible for coverage in his/her own employer- sponsored group health plan).
Series 2 Indicator Codes: 1095-C Employee Statement Line 16
| Code/Line 16 | What it means |
| 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 wherein 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 (“FT”) employee. Enter code 2B if the employee is not a FT employee for the month and did not enroll in MEC, if offered for the month. Enter code 2B also if the employee is a FT employee for the month and the 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 the affordability safe harbor, had the employee declined enrollment in the coverage). 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 FT 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 instead). |
| 2D | Employee in a Limited Non-Assessment Period (“LNP”)*. Enter code 2D for any month during which an employee is in a LNP. |
| 2E | Multiemployer interim rule relief. Enter code 2E for any month for which the multiemployer arrangement interim guidance applies for that employee, regardless of whether any other code in Code Series 2 (including code 2C) might also apply. See Form 1095-C instructions for more details. |
| 2F | Affordability Form W-2 safe harbor. Enter code 2F if the employer used the Form W-2 safe harbor to determine affordability 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 | Affordability FPL safe harbor. Enter code 2G if the employer used the FPL safe harbor to determine affordability for this employee for any month(s). |
| 2H | Affordability rate of pay safe harbor. Enter code 2H if the employer used the rate of pay safe harbor to determine affordability for this employee for any month(s). |
* A LNP is a period of time an employer would not be penalized for not offering coverage, to an employee on a waiting period, a look-back measurement period, or an administrative period following a measurement period.
COBRA & The Related Codes
When offering COBRA coverage, the employer will use the following indicator codes:
| Employment Termination | For an employee that terminates employment, and if offered COBRA all subsequent months following termination are coded as 1H for Line 14 and 2A in Line 16 (Line 15 is blank). |
| Continued Employment with COBRA Qualifying Event | An employee that experiences a qualifying event (e.g., a reduction in hours of employment) that results in ineligibility for benefits and COBRA coverage is offered at the same cost of an active employee (i.e., as if the employee was still full-time/benefit-eligible and coverage is affordable), Lines 14, 15 and 16 as any other regular full-time employee. However, if an employee loses eligibility for coverage and is required to pay more than an active employee, the forms should be coded differently. For example, if only the employee is offered COBRA coverage (because only the employee was covered under the plan before the reduction in hours), then the Line 14 should be coded with 1B, Line 15 would include the cost of coverage, and Line 16 should be completed using the appropriate code (for example, 2C, if the employee elects coverage). |
