Form 1095 is an IRS information return that documents health insurance coverage under the Affordable Care Act. There are three versions (1095-A, 1095-B, and 1095-C), and each serves a different purpose depending on who provides the coverage and how large your company is. Most employers don't realize they might be responsible for filing two of these forms simultaneously, especially when they switch from fully-insured to self-insured health plans.
I got a frantic email from an HR manager at a 65-employee company last March. "We've been filing 1095-C forms for years," she wrote. "But our insurance broker just told us we also need to file 1095-B forms because we switched to a self-insured plan last year. Is that true?"
Yes, it was true. And she had missed the filing deadline by three weeks.
The penalty? $330 per form for failure to file, plus another $330 per form for failure to furnish to employees. That's potentially $42,900 in avoidable penalties. This is exactly why so many employers turn to ACA compliance reporting services: the rules are complicated, the deadlines are firm, and the penalties are automatic.
This guide breaks down everything you need to know about Form 1095 compliance in 2025. You'll learn which forms your company needs to file based on your size and plan type, how to avoid the most common filing mistakes that trigger penalties, what the new website notice option means for your 2025 filing, and how to navigate state-specific requirements that override federal rules. By the end, you'll know exactly what forms you're responsible for, when they're due, and how to file them correctly so you can avoid joining the long list of employers who learn about Form 1095 requirements through an IRS penalty letter.
Which Form 1095 Do You Need?
Here's the foundation: Form 1095 exists to document health coverage under the Affordable Care Act. But there are three versions, and your responsibilities depend on your company size, your plan type, and where your employees get coverage.
Form 1095-A
This is the only one you don't handle as an employer. The Health Insurance Marketplace (federal or state exchanges) sends Form 1095-A directly to individuals who purchased coverage through the Marketplace.
Your employees who bought Marketplace coverage receive this form from the exchange, not from you. You never touch it.
Form 1095-B
Form 1095-B reports that individuals had minimum essential coverage. It's issued by:
- Insurance companies (for fully-insured plans)
- Small employers with self-insured plans (under 50 full-time employees)
- Government programs (Medicare, Medicaid, TRICARE, VA)
If you're a small employer (fewer than 50 full-time employees) with a self-insured health plan, you file Form 1095-B for every individual covered under your plan.
If you're a small employer with fully-insured coverage, your insurance carrier files Form 1095-B. You don't.
Form 1095-C
Form 1095-C reports what coverage you offered to full-time employees and whether anyone enrolled in your self-insured coverage.
If you're an Applicable Large Employer (50 or more full-time plus full-time equivalent employees), you file Form 1095-C for every full-time employee, regardless of whether they enrolled in your coverage.
Here's the twist that confuses everyone: If you're an ALE with a self-insured plan, you use Form 1095-C to report both your offer of coverage (Part II of the form) and who was actually covered (Part III of the form). You don't file separate 1095-B forms because the 1095-C covers both requirements.
But if you're an ALE with fully-insured coverage, you only complete Parts I and II of Form 1095-C. Your insurance carrier files separate 1095-B forms to report who was actually covered.
Decision Tree - Which Forms Do You File?
Let me make this crystal clear with a simple decision tree.
Step 1: How many full-time and full-time equivalent employees did you have in 2024?
- Fewer than 50 - You're not an ALE. Skip to Step 2.
- 50 or more - You're an ALE. You must file Form 1095-C. Continue to Step 2.
Step 2: Do you offer a self-insured health plan?
- Yes, and you're an ALE - File Form 1095-C for every full-time employee. Part III reports covered individuals. You don't file 1095-B forms.
- Yes, and you're NOT an ALE - File Form 1095-B for every covered individual. You don't file 1095-C forms.
- No, you offer fully-insured coverage and you're an ALE - File Form 1095-C for every full-time employee. Your insurance carrier files 1095-B forms separately.
- No, you offer fully-insured coverage and you're NOT an ALE - Your insurance carrier files 1095-B forms. You don't file anything (unless you're in a state with additional requirements).
Step 3: Are any employees covered under Marketplace plans?
If employees purchased Marketplace coverage, they receive Form 1095-A from the Marketplace, not from you. This doesn't create any filing obligation for you.
The 2025 Deadlines You Can't Miss
Form 1095 has two separate deadlines: one for furnishing forms to individuals, one for filing with the IRS.
Furnishing to Individuals:
- Traditional method: March 3, 2025 (for 2024 coverage)
- New option: Post a notice on your website by March 3 stating that forms are available upon request. You must provide the form within 30 days of request.
The new option (effective for 2024 forms) allows you to skip automatically mailing forms to everyone. Instead, you post a notice that employees can request their form if needed.
Critical detail: State requirements may override this federal option. California, Massachusetts, New Jersey, and Rhode Island still require you to furnish forms to residents by their state deadlines, regardless of the federal notice option.
Filing with the IRS:
- Paper filing: February 28, 2025 (only allowed if filing fewer than 10 forms)
- Electronic filing: March 31, 2025 (required for 10 or more forms)
You must file Form 1094-C (for employers filing 1095-C) or Form 1094-B (for small employers filing 1095-B) as a transmittal form along with your stack of 1095 forms. The 1094 form summarizes your filing and provides aggregate data.
The Penalties That Make This Expensive
Missing Form 1095 deadlines or filing incorrect forms triggers automatic IRS penalties. There's no warning. There's no grace period. The penalties just show up.
Failure to File Penalties (Section 6721)
$330 per form if you fail to file with the IRS by the deadline or file with incorrect information.
Maximum penalty: $3,987,000 per year for large employers.
Failure to Furnish Penalties (Section 6722)
$330 per form if you fail to provide forms to employees/individuals by the deadline or provide incorrect forms.
Maximum penalty: $3,987,000 per year.
These penalties are separate. If you file late with the IRS and furnish late to employees, you're looking at $660 per form - $330 for each violation.
Correction Opportunities:
If you correct failures within specific timeframes, penalties are reduced:
- Correct within 30 days: $60 per form (maximum $630,000)
- Correct by August 1: $130 per form (maximum $1,993,500)
- Correct after August 1 or not at all: $330 per form (maximum $3,987,000)
Intentional Disregard:
If the IRS determines you intentionally disregarded the filing requirement, the penalty jumps to $660 per form with no maximum cap.
Reasonable Cause Relief:
You can request a waiver of penalties if you can demonstrate reasonable cause and show that you acted responsibly both before and after the failure. This is a high bar. "We didn't know" isn't reasonable cause. System failures might be, if you can document your efforts to comply.
Employer Shared Responsibility Penalties - The Bigger Risk
4980H penalties are for failing to file or filing incorrectly. But there's a much larger penalty lurking if you don't offer adequate coverage.
4980H(a) Penalty - The Sledgehammer
If you're an ALE and you fail to offer minimum essential coverage to at least 95% of your full-time employees (and their dependents), and at least one full-time employee receives a premium tax credit on the Marketplace, you owe this penalty.
2025 penalty: $2,900 per year per full-time employee (minus the first 30 employees).
For a 100-employee company, that's $2,900 × 70 employees = $203,000 annually.
4980H(b) Penalty - The Tack Hammer
If you offer coverage to at least 95% of full-time employees, but the coverage is unaffordable or doesn't provide minimum value, and any full-time employee receives a premium tax credit, you owe this penalty.
2025 penalty: $4,350 per year per employee who received the premium tax credit.
The 4980H(b) penalty is assessed per affected employee, not for your entire workforce.
How Form 1095-C Protects You:
The IRS uses the data on Form 1095-C to determine whether you owe these penalties. Line 14 shows what you offered. Line 15 shows your employee contribution. Line 16 shows your safe harbor.
If you complete these lines correctly and use the proper safe harbor codes, you have documentary evidence that your coverage was affordable and met minimum value.
If you leave Line 16 blank or use the wrong codes on Line 14, you're giving up your defenses before the IRS even sends a penalty letter.
Common Scenarios - What Forms Do You File?
Let me walk through real situations to show you exactly which forms you need.
Scenario 1: Fully-insured ALE
You have 75 full-time employees. You offer fully-insured health coverage through Blue Cross Blue Shield. 50 employees enroll, 25 waive coverage.
Your filing obligation:
- File Form 1095-C for all 75 full-time employees (enrolled and waived)
- File Form 1094-C as the transmittal
- Do NOT file Form 1095-B - your insurance carrier files those separately for the 50 enrolled employees
Scenario 2: Self-insured ALE
You have 85 full-time employees. You sponsor a self-insured health plan. 60 employees enroll in coverage (some with family members, totaling 140 covered individuals).
Your filing obligation:
- File Form 1095-C for all 85 full-time employees
- Complete Part III of Form 1095-C for the 60 employees who enrolled, listing all covered individuals
- File Form 1094-C as the transmittal
- Do NOT file Form 1095-B - the 1095-C with Part III completed satisfies both requirements
Scenario 3: Small employer with self-insured plan
You have 35 full-time employees. You sponsor a self-insured health plan. 28 employees enroll.
Your filing obligation:
- File Form 1095-B for the 28 enrolled employees (and their covered family members)
- File Form 1094-B as the transmittal
- Do NOT file Form 1095-C - you're not an ALE, so you don't have the employer mandate reporting requirement
Scenario 4: Small employer with fully-insured plan
You have 40 full-time employees. You offer fully-insured coverage through Aetna. 32 employees enroll.
Your filing obligation:
- Nothing. Your insurance carrier (Aetna) files Form 1095-B for the 32 enrolled employees
- You have no Form 1095 filing obligation at all
Scenario 5: Controlled group
Your parent company has 30 employees in Texas. Your subsidiary has 25 employees in California. Together, you're an ALE (55 total employees).
Your filing obligation:
- Each entity files separate Forms 1095-C and 1094-C for its own full-time employees
- Parent company: 1094-C and 1095-C for 30 employees
- Subsidiary: 1094-C and 1095-C for 25 employees
- Both forms indicate membership in an aggregated ALE group
- The California subsidiary must also file California state forms for its 25 California residents
The New 2025 Notice Option - Should You Use It?
Starting with 2024 forms (due in 2025), employers can post a website notice instead of automatically mailing Form 1095 to every individual.
Here's how it works:
Post a notice on your website that says (in plain language):
- Forms 1095 are available upon request
- Here's how to request: email address, mailing address, phone number
- You'll receive your form within 30 days
The notice must:
- Be posted by March 3, 2025
- Remain on your website through October 15, 2025
- Be clear, conspicuous, and accessible
- Use plain, non-technical language
- Be easy to find (main page or prominent link)
When you should use the notice option:
- You have a large workforce where most employees don't need the forms
- Your website is accessible to all employees
- You have systems to process and fulfill requests within 30 days
- You're not in a state that requires automatic furnishing (see next section)
When you should NOT use the notice option:
- You employ residents of California, Massachusetts, New Jersey, or Rhode Island (these states require automatic furnishing)
- Your employees don't have reliable website access
- You can't commit to responding to requests within 30 days
- Your company is under 100 employees (automatic mailing is probably easier)
Critical limitation: The notice option only applies to furnishing forms to individuals. You still must file all forms with the IRS by March 31.
State-Specific Requirements That Override Federal Rules
Don't assume that meeting federal Form 1095 requirements covers everything. Six states have their own reporting mandates.
California
- ALEs must file Forms 1095-C with California Franchise Tax Board by March 31
- Self-insured employers must file Forms 1095-B with California
- California has NOT adopted the notice option - you must furnish forms to California residents by January 31 (though no penalty for missing that date)
Massachusetts
- ALL employers (regardless of size) must file Form MA 1099-HC (Massachusetts-specific form, not federal Form 1095)
- Deadline: January 31 to file with state, March 3 to furnish to employees
- This is in addition to, not instead of, federal Form 1095 requirements if you're an ALE
New Jersey
- ALEs employing New Jersey residents must file Forms 1095-C with New Jersey Division of Taxation by March 31
- Must furnish forms to New Jersey residents by March 3
- New Jersey requires this even if you don't withhold New Jersey payroll taxes
Rhode Island
- Employers with self-insured plans covering Rhode Island residents must file Forms 1095 with Rhode Island by March 31
- Furnish to Rhode Island residents by March 3
District of Columbia
- ALEs must file Forms 1095-C with D.C. Office of Tax and Revenue by April 30 (30 days after federal deadline)
- D.C. considers federal furnishing requirement sufficient - no separate furnishing obligation
Vermont
- No additional reporting currently required
- Vermont relies on federal Form 1095-C distribution
- If federal requirements are ever eliminated, Vermont will implement its own reporting
If you employ residents in any of these states, you're juggling multiple filing requirements with different deadlines and different portals. The federal notice option doesn't apply to state furnishing requirements.
How to Avoid the Most Common Form 1095 Mistakes
After handling thousands of ACA filings, I can tell you the errors that show up repeatedly:
Mistake 1: Filing only for enrolled employees
File Form 1095-C for every full-time employee, regardless of whether they enrolled. The form documents your offer, not their enrollment decision.
Mistake 2: Leaving months blank
Complete all 12 months on every form. Use appropriate codes (1H, 2B, etc.) for months when the employee wasn't full-time or wasn't employed.
Mistake 3: Using the wrong Line 14 code
Line 14 reports what you offered, not what the employee chose. If you offered family coverage to everyone, every full-time employee gets the same Line 14 code, regardless of enrollment.
Mistake 4: Skipping Line 16
Line 16 safe harbor codes are "recommended" by the IRS. That means "do it." These codes protect you from affordability penalties.
Mistake 5: Completing Part III for fully-insured plans
If you offer fully-insured coverage, leave Part III blank on Form 1095-C. Your carrier reports coverage on Form 1095-B. Don't duplicate.
Mistake 6: Missing the electronic filing threshold
If you file 10 or more forms, you must file electronically. Paper filing triggers a $330-per-form penalty above that threshold.
Mistake 7: Forgetting about controlled groups
If your company is part of a controlled group, each entity files separately but indicates membership in the aggregated group. Don't file one combined return.
Mistake 8: Ignoring state requirements
Federal compliance doesn't equal state compliance. If you employ residents in mandate states, you have additional filing obligations.
Your 2025 Form 1095 Compliance Checklist
Here's your month-by-month plan to handle Form 1095 correctly:
December 2024:
- Identify your ALE status for 2025 (based on 2024 employee counts)
- Determine if you're offering self-insured or fully-insured coverage
- Pull final employee data: who was full-time each month of 2024
- Review your controlled group structure if applicable
- Register for state filing portals if you employ residents in mandate states
January 2025:
- Generate Form 1095-C (if you're an ALE) or Form 1095-B (if you're a small self-insured employer)
- Review a sample of forms for accuracy: correct codes, all 12 months completed, proper SSNs
- Decide whether to use the new website notice option or automatically furnish forms
- If using the notice option, draft and prepare your website notice
By February 28:
- If filing fewer than 10 forms on paper, mail to IRS by February 28
- Most employers won't use this option
By March 3:
- If automatically furnishing forms, distribute to all employees by March 3
- If using the website notice option, post the notice by March 3
- Furnish forms to employees in California, Massachusetts, New Jersey, Rhode Island by March 3 (state requirements override federal notice option)
By March 31:
- File Forms 1095-C and 1094-C (or 1095-B and 1094-B) electronically with IRS
- File state forms with California, New Jersey, Rhode Island by March 31
- File Massachusetts Form MA 1099-HC by January 31 (earlier state deadline)
By April 30:
- File forms with D.C. Office of Tax and Revenue by April 30
Through October 15:
- If you used the website notice option, keep the notice posted through October 15
- Process any employee requests for forms within 30 days of request
- Maintain all Form 1095 records for at least six years
When To Get Expert Help
Form 1095 compliance isn't rocket science, but it is detailed, deadline-driven, and expensive when you get it wrong.
If any of these apply to you, don't try to DIY your filing:
- You're filing for the first time (the learning curve is steep)
- You switched from fully-insured to self-insured mid-year (complicated reporting)
- You're part of a controlled group spanning multiple states
- You have employees in California, Massachusetts, New Jersey, Rhode Island, or D.C. (state filing requirements)
- You employ 100+ people (penalty risk too high to wing it)
- Your payroll system doesn't automatically generate ACA forms
- It's February and you haven't started yet (you're running out of time)
- You've received an IRS penalty letter in the past (patterns tend to repeat)
1095 EZ has been filing Forms 1095 since 2015. We've handled millions of forms for employers in every industry and every state. We know the codes, the deadlines, the state requirements, and the IRS systems.
More importantly, we know how to fix complicated situations - the mid-year acquisitions, the employee who worked for three different entities in your controlled group, the spouse who was only covered for six months, the dependent who aged out in October.
We generate your forms, review them for accuracy, file them with the IRS and applicable states, and either furnish them to your employees or help you set up the website notice correctly.
Zero penalties. Zero stress. One clear price.
The March 31 deadline is firm. The IRS doesn't offer extensions. Penalties are automatic.
If you're behind schedule, have questions about your filing requirements, or just want someone else to handle the technical details, contact 1095 EZ today. We'll review your situation, explain exactly what you need to file, and give you a straightforward quote.
Don't let Form 1095 complexity turn into Form 1095 penalties. Get it done right.