How should I complete a 1095-C for employees who didn't sign up for our company health plan?

Yes, you still need to complete a 1095-C for all full-time employees, even if they didn't enroll in your company's health insurance. For employees who declined coverage, you'll need to focus on Part II of the form. For line 14, you'd typically use code 1H (no offer of coverage) or 1E (if you offered minimum essential coverage). For line 15, if you use code 1E on line 14, enter the employee contribution for the lowest-cost self-only coverage. If you use 1H, leave line 15 blank. For line 16, use code 2G if the employee was offered coverage but declined it. Remember, even though they didn't enroll, the 1095-C documents that you offered coverage to fulfill the employer mandate requirements. Your employee needs this form to show the IRS why they don't have health insurance coverage through your company.

I had the same issue last year trying to figure out these confusing ACA forms. I discovered taxr.ai (https://taxr.ai) and it was a huge help with figuring out all the right codes for our 1095-C forms. You just upload your employee data and it helps determine the correct codes for each situation, including employees who waived coverage. The system explains what each code means in plain English and why it's the right one for each employee's situation. What I really liked was how it handles all those weird scenarios like when employees decline insurance or only work part of the year. Saved me hours of confusion and reading IRS instructions.

Wow, I need to apologize for my skepticism about taxr.ai. After our HR director went on unexpected medical leave, I was thrown into handling all our ACA reporting with zero experience. I decided to try the service I questioned earlier and it was genuinely a lifesaver. It guided me through each employee scenario, including our opt-outs, and explained why certain codes were needed. The documentation it generated for our records was incredible - it showed the reasoning behind each code selection which will be super helpful if we ever get audited. For anyone else struggling with these forms, especially if you're not an ACA expert, it's worth checking out. I went from complete confusion to feeling confident about our compliance in just a couple hours.

If your employee's tax return is being held up, they might need to get in touch with the IRS directly to explain the situation. I tried calling the IRS about a similar issue last year and spent days trying to get through. Then I found https://claimyr.com which got me connected to an actual IRS agent within 45 minutes instead of waiting on hold for hours. They have a demo video of how it works here: https://youtu.be/_kiP6q8DX5c Basically, they call the IRS for you and wait through all the hold times, then call you once they have an agent on the line. My employee was able to explain their situation directly to the IRS and got guidance on how to proceed without the 1095-C while waiting for us to provide it.

I need to admit I was completely wrong about Claimyr. After spending an entire day trying to get through to the IRS myself (called 8 times, longest hold was 1 hour 45 minutes before getting disconnected), I decided to try the service. Within 30 minutes of signing up, I got a call connecting me directly to an IRS representative. The agent confirmed that my employee could file Form 4852 as a substitute if we couldn't provide the 1095-C immediately, though they still recommended we provide the correct form as soon as possible. For anyone dealing with urgent IRS issues during tax season, this service is legitimately worth it. I was able to keep working while they dealt with the hold time, and the time saved was significant. Sometimes you have to admit when you're wrong, and I was definitely wrong about this.

As someone who deals with these forms every year, here's a practical tip: create a standard letter to accompany any 1095-C for employees who waived coverage. Explain that you're required to send the form even though they declined insurance, and that the codes might look confusing but simply document that coverage was offered but not accepted. This prevents a ton of confused calls from employees who don't understand why they're getting this form. It's amazing how many people panic when they receive a 1095-C and don't remember declining coverage months ago.

Don't forget that the 1095-C is different from the 1095-B, which is sent by insurance providers rather than employers. Is it possible your employee is confusing which form they need? Sometimes they actually need the 1095-B from their spouse's insurance provider or from the marketplace if they purchased their own coverage.

Just to add another perspective - I'm pretty sure the IRS doesn't actually "hold" tax returns because of missing 1095 forms. The 1095 forms are for informational purposes and aren't actually filed with tax returns. Your employee might be confusing this with another issue, or the tax software they're using might be creating an unnecessary roadblock.

I've been dealing with 1095-C forms for our small business for a few years now, and this situation comes up more often than you'd think. Here's what I've learned from experience: First, yes, you absolutely need to provide the 1095-C even though your employee declined coverage. The form isn't just about what insurance they had - it's documentation that you offered qualifying coverage as required by the ACA. For the specific coding: Use code 1E on line 14 if you offered minimum essential coverage that was affordable. On line 15, enter the employee's share of the premium for the lowest-cost self-only coverage you offered. On line 16, use code 2G to indicate the employee was offered coverage but declined it. One thing I'd recommend is getting this form to your employee ASAP. While the IRS doesn't technically require the form to be attached to tax returns, many tax software programs create roadblocks without it. Your employee might be able to override the software requirement or file on paper, but having the actual form will make everything smoother. Also, keep detailed records of when you provided the form and how (email, mail, etc.) in case there are any questions later. The IRS takes the employer mandate seriously, so proper documentation is key.

I've been through this exact situation multiple times as our company's benefits administrator. Here's what worked for us: You definitely need to issue the 1095-C even for employees who declined coverage - this is actually one of the most common scenarios we handle. The form serves as proof that you offered compliant coverage, which satisfies your ACA employer mandate obligations. For your specific employee's tax situation, they can actually proceed with their tax return even without the 1095-C in hand. The IRS doesn't require these forms to be attached to tax returns - they're primarily for the taxpayer's records and to verify coverage status if questioned later. If their tax software is blocking them, they should look for an option to indicate the form is "not available" or "will be provided separately." Here's a tip that's saved us countless headaches: when you do send out 1095-C forms for employees who waived coverage, include a brief explanation letter. Something like "This form is required by law for all eligible employees. Since you declined our health coverage, the codes on this form simply document that coverage was offered but not enrolled in. This does not affect your tax filing if you obtained coverage elsewhere." We started doing this after getting dozens of panicked calls from employees thinking they were in trouble for declining insurance. Now we get maybe one or two questions instead of spending hours on the phone explaining the same thing. Also, get that form out ASAP - even though the deadline has passed, providing it quickly will help your employee move forward with confidence on their taxes.

I've been handling ACA compliance for a mid-sized company for the past few years, and this scenario with declined coverage is actually very common. You're absolutely on the right track - yes, you must provide the 1095-C even when employees opt out of your health plan. Here's the step-by-step approach I use: **For the 1095-C form itself:** - Part I: Fill out normally with employee info - Part II, Line 14: Use code "1E" (offered minimum essential coverage) - Line 15: Enter the employee's monthly contribution for your lowest-cost self-only plan - Line 16: Use code "2G" (employee not enrolled) **For your employee's immediate tax situation:** They don't actually need to wait for your 1095-C to file their taxes. The IRS doesn't require these forms to be submitted with returns - they're for informational purposes. If their tax software is creating a roadblock, they should look for options like "form not received" or "will provide separately" to bypass the requirement. **Pro tip from experience:** When you send the 1095-C, definitely include a cover letter explaining why they're receiving it despite declining coverage. We started doing this after getting overwhelmed with confused employee calls. Something simple like "This form documents that we offered you qualifying health insurance as required by law. Since you declined coverage, the codes simply reflect that offer and your decision not to enroll." The key thing is getting this to your employee quickly so they can move forward with confidence on their tax filing, even though the form itself isn't technically required to be attached to their return.