The ACA requires employers to furnish Form 1095-C to employees annually. The Form 1095 provides a formal record of coverage offered to each employee and whether the coverage is deemed “affordable” by ACA standards. In addition, the 1094-C (transmittal form) must be submitted to the IRS along with copies of all employee 1095-Cs.
In welcome news, employers are no longer required to automatically send Form 1095-C to individuals. The IRS has clarified that the requirement for furnishing the statements can be met if the employer provides clear, conspicuous, and accessible notice on its website that an individual may request a copy of their Form 1095-C statement and a copy is then furnished to the individual in a timely manner. For this purpose, the statement is timely furnished if provided to the individual no later than the later of January 31, 2026, or 30 days after the date of the request.
The option of not automatically sending 1095s to all employees and defaulting to providing notice and furnishing upon request is a welcome relief for many employers.
What About State Filing Requirements?
Employers should be cautious about defaulting to the furnish-upon-request post-not-mail option when state filing requirements are in play. Many states have been slow to adopt the post-notice-and-furnish method of furnishing statements. Employers are advised to confirm the state filing requirements to assure compliance with statement requirements.
California employers must still actively furnish Form 1095-C to each full-time employee. The Franchise Tax Board (FTB) has not adopted the new flexible federal rule that allows employers to post a notice and furnish 1095s upon request only.
To Employees:
To Employees (in CA and MA):
To the IRS:
The penalties for failing to file correct information returns with the IRS (Form 1094-C/1095-C) can be substantial. In addition, failing to furnish correct statements to employees and failing to file forms are assessed separately.
| Correction Timing | Penalty | Maximum |
| Within 30 days after the due date | $60 per return | $683,000 |
| Between 30 days and August 1 | $130 per return | $2,049,000 |
| On or after August 1 | $340 per return | $4,098,500 |
| Intentionally neglecting to file | $680 per return | No limit |