Draft Forms 1094-C and 1095-C for 2025 Reporting

The IRS has issued draft versions of Forms 1094-C and 1095-C and their instructions for the 2025 tax year. These forms are used by Applicable Large Employers (ALEs), generally those with 50 or more full-time or full-time equivalent employees, to report offers of health coverage to employees and to comply with the Affordable Care Act’s (ACA) employer shared responsibility provisions.

What Employers Need to Know

• Who Must File: Each ALE Member must file Form 1094-C to transmit information to the IRS and must provide a Form 1095-C for every full-time employee employed during the calendar year. ALEs offering self-insured coverage must also report enrollment information for employees and covered dependents.
• Deadlines: For 2025 calendar year coverage, employers must furnish Form 1095-C to employees by March 2, 2026. The IRS filing deadline is also March 2, 2026, for paper filers, and March 31, 2026, for electronic filers. Extensions of time to file or furnish may be available through Form 8809.
• Electronic Filing: Employers filing 10 or more information returns in aggregate must file electronically. Those who do not comply without a waiver may face penalties.
• Corrections: Employers must promptly file corrected returns when errors are identified. Certain minor dollar discrepancies may qualify for safe harbor relief, but larger errors must be corrected to avoid penalties.

Reminders for HR Teams

• Ensure HR, payroll, and benefits systems are aligned to capture all the necessary data throughout the year.
• Review employee classifications (full-time vs. part-time) carefully, as reporting obligations hinge on accurate full-time employee counts.
• Employers that sponsor self-insured plans should confirm processes for collecting and reporting dependent coverage information.
• Consider electronic consent procedures for employees who will receive their Form 1095-C electronically.

Why This Matters

The draft forms reflect the continuing complexity of ACA reporting and reinforce the importance of data accuracy. Penalties for incorrect or late filings remain steep: $340 per return, up to $4,098,500 annually, with higher penalties for intentional disregard.

Employers should use the draft instructions to begin preparations now, even before the IRS finalizes the forms. The final versions are expected later this year.

For more information and to access the draft forms, visit the IRS site: Form 1094-C and Form 1095-C.

BAS can help with your ACA data collection and compliance requirements. For information about BAS’ ACA services, contact your account manager or solutions@basusa.com.

Benefit Allocation Systems (BAS) provides best-in-class, online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.

MyEnroll360 can Integrate with any insurance carrier for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and many others), and integrate with any payroll system for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and many others).

This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.