What is Form 1094-C and who needs to file it?

Form 1094-C is the transmittal form employers use to summarize and submit their ACA health coverage offers and reporting for full-time employees to the IRS. Applicable Large Employers (ALEs) with 50 or more full-time or full-time equivalent employees are required to file this form annually alongside individual 1095-C forms.

What key information is included on Form 1094-C?

Form 1094-C includes employer identification details, monthly counts of full-time and full-time equivalent employees, ALE member information if applicable, and certifications regarding the offer of minimum essential coverage. It also reports codes that summarize coverage offers and affordability for each month of the calendar year.

Why is accurate Form 1094-C reporting important for employers?

Accurate reporting on Form 1094-C is crucial because it serves as a declaration of ACA compliance to the IRS. Inaccuracies or failure to file can lead to penalties and IRS penalty notices such as the 226-J letter. Proper reporting also helps avoid costly employer shared responsibility payments.

How does ACA-Track assist employers with Form 1094-C and ACA reporting?

ACA-Track automates the collection of employee hours and eligibility data, calculates full-time equivalents, generates accurate 1094-C and 1095-C forms, and facilitates electronic IRS filing. It also identifies potential errors before submission and securely stores all ACA compliance data for easy access in audits.

What are the risks of not properly filing Form 1094-C?

Failure to file Form 1094-C or filing inaccurate forms can result in substantial IRS penalties, including fines for late or missing filings. Employers may also face employer shared responsibility payments if the IRS determines they did not meet ACA coverage requirements.

What Goes on Form 1094 C and Why It Matters

What Goes on Form 1094-C and Why It Matters

Navigating the complexities of Affordable Care Act (ACA) compliance can feel overwhelming, especially when it comes to understanding the critical IRS forms involved. Among these, Form 1094-C plays a pivotal role—but what exactly goes on this form, and why is it so important? In this post, we’ll break down the essential details of Form 1094-C, explain its significance for Applicable Large Employers (ALEs), and highlight how using a trusted compliance partner like ACA-Track can simplify the entire process.

What is Form 1094-C?

Form 1094-C is the transmittal form that ALEs must file with the IRS alongside their employee-level ACA reporting forms—Form 1095-C. Think of Form 1094-C as the cover sheet or summary report that accompanies the detailed 1095-C forms for each full-time employee.

It acts as a declaration of compliance, providing the IRS with a snapshot of your company’s health coverage offerings and whether you’ve met your employer shared responsibility obligations under the ACA.

What Information Goes on Form 1094-C?

Form 1094-C collects important data in several sections:

1. Employer Information

Employer Identification Number (EIN): Your company’s unique tax ID.
Name and Address: The official legal name and primary mailing address.
Contact Information: A contact person who the IRS can reach for questions.

2. ALE Member Information

If your company is part of a controlled group of companies, Form 1094-C aggregates information from all ALE members.

Number of ALE Members: Total count of all related employers in the group.
Information about each ALE member: EIN, name, and number of full-time employees.

3. Number of Full-Time Employees and Full-Time Equivalent Employees (FTEs)

This includes counts of:

Full-time employees for each month.
Total full-time equivalent employees for each month.

This monthly breakdown is critical because the ACA’s employer shared responsibility penalties depend on whether you meet or exceed the 50 full-time employee threshold.

4. ALE Member Indicator

You must indicate if the return is for:

A member of an aggregated ALE group (yes/no).
Whether you are filing a consolidated return on behalf of all ALE members.

5. Reporting Type

The form requires you to specify the type of coverage you offered:

Whether the employer offered minimum essential coverage to at least 95% of full-time employees and their dependents.
Whether the coverage offered was affordable according to ACA standards.
Whether the employer is self-insured or fully insured.

6. Certifications

You certify that you are submitting a complete and accurate report.
You certify that you have offered minimum essential coverage to your full-time employees or acknowledge potential penalties if not.

7. Codes for Reporting

There are several codes reported on Form 1094-C that summarize offers of coverage for each month, including:

Line 22 codes: These codes reflect whether coverage was offered to employees and dependents.
Line 16 and 17 codes: These indicate the type of coverage offered and affordability safe harbor methods.

Why Form 1094-C Matters

1. It Summarizes Your ACA Compliance

Form 1094-C tells the IRS whether your company is meeting its obligations to offer affordable health insurance coverage to full-time employees. It helps the IRS evaluate whether your company is subject to potential employer shared responsibility payments (penalties).

2. It Supports Employee-Level 1095-C Forms

While the 1095-C provides individualized reporting for each employee, Form 1094-C aggregates that data to give the IRS a broader view of your employer group’s ACA compliance.

3. It Is Required for IRS ACA Reporting

Filing Form 1094-C along with 1095-Cs is mandatory for all ALEs with 50 or more full-time employees. Failure to file or filing inaccurate forms can lead to significant penalties.

4. Helps Prevent Costly Penalties

Accurate and timely filing of Form 1094-C helps avoid the IRS’s penalty notices, such as the 226-J penalty letter, which assesses fines based on missing or incorrect ACA reporting.

Challenges of Completing Form 1094-C Without the Right Tools

Gathering the data needed for Form 1094-C can be complex because:

You must track actual hours worked for all employee types (full-time, part-time, variable hour, seasonal).
Data comes from multiple sources—payroll, HRIS, benefits, timekeeping systems.
Accurate calculation of full-time equivalents and monthly employee counts requires meticulous data monitoring.
Form formatting and IRS electronic filing standards (including XML file submissions) must be met.

Many employers struggle with these challenges, increasing the risk of errors and penalties.

How ACA-Track Simplifies Form 1094-C Preparation and ACA Compliance

To confidently handle ACA reporting and avoid costly mistakes, many organizations rely on ACA-Track, a proven ACA compliance solution designed to make the process efficient and worry-free.

ACA-Track Features That Matter:

Comprehensive Data Collection: Automatically collects employee hours from payroll, timekeeping, mobile devices, and more.
Accurate Full-Time Status Monitoring: Tracks variable hour and part-time employees to determine eligibility for coverage offers.
Automated Form Creation: Electronically generates accurate 1094-C and 1095-C forms in IRS-compliant formats.
Electronic Filing Support: Files XML files directly with the IRS, including managing Transmitter Control Code (TCC) applications.
Error Detection and Correction: Monthly line code audits and color-coded alerts help identify and fix ACA reporting errors before submission.
Dedicated Client Success Advisor: Personalized support ensures your unique business needs are met every step of the way.
Secure Cloud-Based Platform: SOC 2 Type 2 compliant data center with encryption and HTTPS transfers for maximum data security.

Conclusion: Form 1094-C Is More Than Just a Form — It’s Your ACA Compliance Declaration

Accurate preparation and submission of Form 1094-C is crucial to fulfilling ACA employer responsibilities and avoiding penalties. It requires a detailed understanding of your workforce, coverage offerings, and IRS reporting requirements.

With the complexities involved, partnering with an expert ACA compliance solution like ACA-Track can transform a daunting task into a streamlined, confident process. Their full suite of tracking, reporting, and auditing tools helps you collect, monitor, and report your ACA data correctly — keeping your business compliant and audit-ready.

If ACA compliance is on your radar this year, consider learning more about how ACA-Track can help you stay on track and avoid penalties: https://aca-track.com/