How to Report ICHRA on Form 1095-C: A Complete Guide for Employers

Introduction: Understanding ICHRA Reporting on Form 1095-C

If your organization offers an Individual Coverage Health Reimbursement Arrangement (ICHRA) to employees, you must understand how to properly report this coverage on Form 1095-C. The 1095-C ICHRA reporting requirements differ significantly from traditional group health plan reporting, and getting it wrong can result in IRS penalty assessments. Since ICHRAs became available in January 2020, many employers have adopted this flexible health benefit option, but the specific reporting codes and procedures remain confusing for HR professionals and benefits administrators.

An ICHRA allows Applicable Large Employers (ALEs) to offer employees a defined contribution toward individual health insurance coverage instead of a traditional group health plan. Under this arrangement, employees purchase their own individual health insurance policy on the marketplace or directly from an insurer, and the employer reimburses them for premiums and potentially other medical expenses. This model provides employers with predictable costs and gives employees flexibility in choosing coverage that best meets their needs.

Proper 1095-C ICHRA reporting is essential because it demonstrates to the IRS that your organization has met its ACA employer mandate obligations. When you offer an ICHRA that meets affordability standards, you satisfy the requirement to offer minimum essential coverage to full-time employees. However, the codes used on Form 1095-C for ICHRA differ from those used for traditional group health plans, and the affordability calculation uses a different methodology. This guide will walk you through everything you need to know to accurately report ICHRA offers on Form 1095-C.

  • Key topics covered: ICHRA eligibility requirements, Line 14 offer codes, Line 15 affordability amounts, Line 16 safe harbor and coverage codes
  • Affordability calculations: How to determine if your ICHRA offer is affordable under IRS rules
  • Special scenarios: Part-time employees, new hires, terminated employees, and employees who waive coverage
  • Common mistakes: Reporting errors that trigger IRS penalties and how to avoid them

What is an ICHRA and How Does It Affect ACA Reporting?

The Basics of Individual Coverage Health Reimbursement Arrangements

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded account that reimburses employees for individual health insurance premiums and, at the employer's option, other qualified medical expenses. Unlike traditional group health plans where the employer selects and partially pays for a specific insurance policy, an ICHRA gives employees the freedom to choose their own individual coverage while receiving financial support from their employer.

ICHRAs were created through regulations finalized by the Departments of Treasury, Labor, and Health and Human Services in June 2019, effective January 1, 2020. They provide a third option for employers beyond traditional group health plans and Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs). Unlike QSEHRAs, which are only available to employers with fewer than 50 employees, ICHRAs can be offered by employers of any size, including those subject to the ACA's employer mandate.

Key characteristics of ICHRAs include:

  • No contribution limits: Employers can contribute any amount to an ICHRA, unlike QSEHRAs which have annual caps
  • Class-based flexibility: Employers can offer different ICHRA amounts to different employee classes based on objective criteria
  • Individual coverage requirement: Employees must be enrolled in individual health insurance coverage to receive ICHRA reimbursements
  • Integration prohibition: ICHRA cannot be offered alongside traditional group coverage to the same class of employees
  • Premium tax credit interaction: Employees offered an affordable ICHRA generally cannot claim premium tax credits on marketplace coverage

ICHRA and the ACA Employer Mandate

For ALEs subject to the ACA employer mandate, offering an ICHRA can satisfy the requirement to offer minimum essential coverage (MEC) to full-time employees. However, to avoid Section 4980H penalties, the ICHRA must meet specific requirements:

Minimum Essential Coverage (MEC):

An ICHRA is considered an offer of MEC when the employer provides a bona fide ICHRA that the employee can use to purchase individual health insurance coverage. This satisfies the requirement to offer coverage under Section 4980H(a), avoiding the "A penalty" that applies when an ALE fails to offer coverage to at least 95% of full-time employees.

Minimum Value (MV):

Unlike traditional group health plans, ICHRAs do not need to meet the minimum value requirement (covering at least 60% of the total allowed cost of benefits). Instead, the focus is on whether the ICHRA is affordable.

Affordability:

An ICHRA is considered affordable if the employee's required contribution for the lowest-cost silver plan available in the employee's location, after accounting for the ICHRA contribution, does not exceed 9.02% of the employee's household income (for 2025). If the ICHRA is not affordable, the employee may be eligible for premium tax credits, and the employer could face Section 4980H(b) penalties if an employee receives a premium tax credit.

ICHRA Affordability Calculation: A Critical Difference

The affordability calculation for 1095-C ICHRA reporting differs from traditional group health plan affordability. For a traditional plan, you compare the employee's required contribution for employee-only coverage to the affordability threshold. For an ICHRA, you must determine:

  1. The monthly ICHRA amount offered - This is the amount the employer will reimburse
  2. The lowest-cost silver plan premium - This is based on the employee's primary residence location and age
  3. The employee's required contribution - This is the silver plan premium minus the ICHRA amount

For example, if an employer offers $500 per month ICHRA and the lowest-cost silver plan in the employee's area costs $650 for the employee's age, the employee's required contribution is $150 per month ($650 - $500). This $150 is then compared to the affordability threshold (9.02% of household income divided by 12) to determine if the offer is affordable.

The IRS provides an ICHRA affordability safe harbor that allows employers to use the lowest-cost silver plan premium for an employee who is 21 years old in the employee's location, rather than the employee's actual age. This simplifies the calculation and provides certainty for employers.

Form 1095-C Line-by-Line ICHRA Reporting Guide

Line 14: Offer of Coverage Codes for ICHRA

When reporting an ICHRA offer on Form 1095-C, Line 14 uses specific codes to indicate the type of coverage offered. The primary codes used for 1095-C ICHRA reporting are:

Code Description When to Use
1L Individual coverage HRA offered to employee only ICHRA is offered to the employee but not to spouse or dependents
1M Individual coverage HRA offered to employee and dependents (not spouse) ICHRA covers employee and dependents, excluding spouse
1N Individual coverage HRA offered to employee, spouse, and dependents ICHRA covers employee, spouse, and all dependents
1O Individual coverage HRA offered to employee and spouse (not dependents) ICHRA covers employee and spouse only
1P Individual coverage HRA offered to employee and conditionally to spouse or dependents ICHRA covers employee; spouse/dependents only if not eligible for other coverage
1Q Individual coverage HRA offered to employee conditionally ICHRA offered only if employee is not Medicare-eligible or other conditions apply

The most commonly used codes are 1L (employee only ICHRA), 1N (ICHRA for employee, spouse, and dependents), and 1P (ICHRA with conditional spousal/dependent coverage). The specific code depends on who is eligible to receive reimbursements under your ICHRA design.

Example 1: Basic Employee-Only ICHRA

ABC Company offers a $400/month ICHRA to all full-time employees. The ICHRA only reimburses the employee's individual health insurance premium, not family coverage. For Line 14, ABC Company would enter code 1L for each month the employee was offered the ICHRA.

Example 2: Family ICHRA

XYZ Corporation offers a $600/month ICHRA that can be used to reimburse premiums for the employee, spouse, and dependent children. Line 14 would show code 1N for months when this offer was in effect.

Line 15: Employee's Share of the Lowest-Cost Monthly Premium

Line 15 is where the 1095-C ICHRA reporting differs most significantly from traditional group plan reporting. For traditional plans, you enter the employee's monthly contribution for the lowest-cost employee-only coverage. For ICHRAs, you enter the employee's required contribution after accounting for the ICHRA reimbursement.

The calculation for Line 15 is:

Lowest-Cost Silver Plan Premium - Monthly ICHRA Amount = Line 15 Amount

However, there's an important nuance: if the ICHRA amount exceeds the silver plan premium (resulting in a negative number), you should enter $0.00 on Line 15. You cannot enter a negative amount.

Using the ICHRA Affordability Safe Harbor:

The IRS allows employers to use a safe harbor premium based on the lowest-cost silver plan for a 21-year-old in the employee's primary residence location. This simplifies reporting because you don't need to determine each employee's actual age. If you use this safe harbor, you should use the same premium amount for all employees in the same location, regardless of their actual ages.

Example 3: Line 15 Calculation

An employer offers $500/month ICHRA. The lowest-cost silver plan for a 21-year-old in the employee's location is $450/month. Since the ICHRA exceeds the premium, Line 15 would show $0.00. This indicates the coverage is fully paid for by the employer, making it automatically affordable.

Example 4: Partial Coverage

An employer offers $350/month ICHRA. The lowest-cost silver plan is $500/month. Line 15 would show $150.00 ($500 - $350 = $150). The affordability determination then depends on whether $150/month exceeds 9.02% of the employee's monthly household income.

Line 16: Safe Harbor and Other Coverage Codes

Line 16 of Form 1095-C provides additional context about the coverage offer. For ICHRA reporting, common codes include:

Code Description ICHRA Application
2A Employee not employed during the month Use for months before hire date or after termination date
2B Employee not a full-time employee Use for months when employee was part-time
2C Employee enrolled in coverage offered Use when employee is receiving ICHRA reimbursements
2D Employee in limited non-assessment period (initial measurement) Use during initial measurement periods for new variable-hour employees
2E Multiemployer interim rule relief Rarely applicable for ICHRA
2F Section 4980H Form W-2 safe harbor Use if applying W-2 safe harbor for affordability
2G Section 4980H federal poverty line safe harbor Use if applying FPL safe harbor for affordability
2H Section 4980H rate of pay safe harbor Use if applying rate of pay safe harbor for affordability

Important Note on Safe Harbor Codes for ICHRA:

The traditional safe harbor codes (2F, 2G, 2H) can still be used with ICHRA to demonstrate affordability, but they work differently. You would compare the employee's required contribution (Line 15 amount) to the applicable safe harbor threshold. For example, if using the federal poverty line safe harbor (2G), the Line 15 amount must not exceed 9.02% of the monthly federal poverty line amount for an individual.

Example 5: Line 16 with Enrolled Employee

An employee is offered an ICHRA throughout 2025 and enrolls in individual coverage, receiving ICHRA reimbursements. For months January through December, Line 16 would show code 2C (employee enrolled in coverage offered). If the employer is also claiming the federal poverty line safe harbor, they could additionally indicate this in their records, though only one code can appear on Line 16.

Line 17: ZIP Code for ICHRA Location

Line 17 is specifically important for ICHRA reporting. This line requires the employee's primary residence ZIP code when an ICHRA offer code (1L, 1M, 1N, 1O, 1P, or 1Q) is entered on Line 14. The ZIP code is essential because ICHRA affordability depends on the cost of coverage in the employee's location.

For traditional group health plan reporting, Line 17 is typically left blank. However, for 1095-C ICHRA reporting, you must enter the five-digit ZIP code of the employee's primary residence as of January 1 of the coverage year (or the employee's start date if later).

Key Points for Line 17:

  • Use the ZIP code where the employee primarily lives, not the work location
  • If the employee moves during the year, use the ZIP code as of January 1 for the entire year
  • If the employee was hired after January 1, use the ZIP code as of their start date
  • This information is critical because silver plan premiums vary significantly by location

Step-by-Step ICHRA 1095-C Reporting Process

Step 1: Gather Employee and ICHRA Information

Before completing 1095-C ICHRA forms, collect the following information for each full-time employee:

  • Employee identification: Name, SSN, address, date of birth
  • Employment dates: Hire date, termination date (if applicable), full-time status by month
  • ICHRA offer details: Monthly ICHRA amount, who is covered (employee only, family), months offer was in effect
  • Employee residence: ZIP code of primary residence as of January 1
  • Lowest-cost silver plan premium: For the employee's ZIP code and age (or age 21 if using safe harbor)
  • Enrollment status: Whether the employee enrolled in individual coverage and received ICHRA reimbursements

Step 2: Determine the Line 15 Amount

Calculate the employee's required contribution for each month:

  1. Identify the lowest-cost silver plan premium for the employee's location
  2. Subtract the monthly ICHRA amount from the silver plan premium
  3. If the result is negative or zero, enter $0.00
  4. Round to the nearest whole dollar

Example 6: Calculating Line 15 for Multiple Employees

Employee ZIP Code Silver Plan (Age 21) ICHRA Amount Line 15
John Smith 10001 $550 $400 $150
Mary Johnson 90210 $480 $400 $80
Bob Wilson 33101 $380 $400 $0
Sarah Davis 60601 $520 $400 $120

Notice how employees in different locations have different Line 15 amounts even though they all receive the same $400 ICHRA. This is because silver plan premiums vary by geography.

Step 3: Select Appropriate Line 14 and Line 16 Codes

For each month, determine:

Line 14 (Offer Code):

  • Was an ICHRA offered this month? If yes, use the appropriate 1L-1Q code
  • Who was covered under the ICHRA (employee only, employee + spouse, employee + family)?
  • Were there any conditional offers?

Line 16 (Safe Harbor/Coverage Code):

  • Was the employee employed this month? If not, use 2A
  • Was the employee full-time this month? If not, use 2B
  • Did the employee enroll in coverage? If yes, use 2C
  • Is a safe harbor being claimed? Use 2F, 2G, or 2H
  • Was this a limited non-assessment period? Use 2D

Step 4: Complete Line 17 ZIP Code

Enter the five-digit ZIP code of the employee's primary residence. This field is mandatory when using ICHRA offer codes on Line 14. Use the ZIP code as of:

  • January 1 of the coverage year for employees hired before January 1
  • The employee's hire date for employees hired on or after January 1

Step 5: Review and File

Before filing 1095-C ICHRA forms:

  • Verify all employee information is accurate and complete
  • Confirm Line 14 codes match your ICHRA design
  • Double-check Line 15 calculations
  • Ensure Line 16 codes are appropriate for each month
  • Verify Line 17 ZIP codes are present for all ICHRA offers
  • File by the Form 1095-C deadline (March 31 for electronic filing)

Common ICHRA 1095-C Reporting Scenarios

Scenario 1: New Hire Offered ICHRA

When a new employee is hired and offered an ICHRA, the reporting depends on the employee's start date and waiting period:

Example 7: New Hire in April

An employee is hired on April 15, 2025, and offered ICHRA effective May 1 after a brief waiting period. The 1095-C would show:

Month Line 14 Line 15 Line 16
Jan-Mar 1H (no offer) Leave blank 2A (not employed)
April 1H (no offer) Leave blank 2D (limited non-assessment period)
May-Dec 1L (ICHRA offered) $125 (calculated amount) 2C (enrolled) or 2G (safe harbor)

Scenario 2: Employee Declines ICHRA Offer

If an employee declines the ICHRA offer (perhaps because they have coverage through a spouse), you still report the offer on Form 1095-C:

Example 8: Declined ICHRA

An employee is offered ICHRA for all of 2025 but declines because they're covered under their spouse's employer plan. Line 14 would show the appropriate ICHRA code (e.g., 1L) for all months, Line 15 would show the calculated employee contribution, and Line 16 would be left blank (or show a safe harbor code if applicable) rather than showing 2C since the employee did not enroll.

Scenario 3: Terminated Employee

When an employee is terminated, the reporting changes after their last day:

Example 9: Mid-Year Termination

An employee covered by ICHRA terminates employment on August 15, 2025:

Month Line 14 Line 15 Line 16
Jan-Jul 1L (ICHRA offered) $100 (calculated) 2C (enrolled)
August 1L (ICHRA offered) $100 2C (enrolled through termination)
Sep-Dec 1H (no offer) Leave blank 2A (not employed)

Scenario 4: Part-Time Employee Becomes Full-Time

When a part-time employee becomes full-time and eligible for ICHRA:

Example 10: Status Change

A part-time employee becomes full-time on July 1 and is offered ICHRA effective August 1:

Month Line 14 Line 15 Line 16
Jan-Jun 1H (no offer) Leave blank 2B (not full-time)
July 1H (no offer) Leave blank 2D (limited non-assessment)
Aug-Dec 1N (ICHRA family) $175 2C (enrolled)

Scenario 5: Different ICHRA Classes

Employers can offer different ICHRA amounts to different employee classes. Each employee's 1095-C reflects their specific ICHRA offer:

Example 11: Salaried vs. Hourly Classes

Company offers $600/month ICHRA to salaried employees and $400/month to hourly employees. A salaried employee's Line 15 might show $50 while an hourly employee's Line 15 might show $250, even if they live in the same ZIP code, because their ICHRA amounts differ.

ICHRA Affordability and Penalty Implications

Understanding ICHRA Affordability Thresholds

For 2025, an ICHRA offer is considered affordable if the employee's required contribution (the amount on Line 15) does not exceed 9.02% of the employee's household income. Since employers typically don't know employees' household income, safe harbors are available.

ICHRA-Specific Affordability Rules:

The required contribution for ICHRA affordability is calculated differently than for traditional group plans. It's based on:

  • The lowest-cost silver plan available through the marketplace
  • In the employee's primary residence location
  • For the employee only (self-only coverage)
  • For an individual who is age 21 (if using the safe harbor) or the employee's actual age

Using Traditional Safe Harbors with ICHRA

Employers can apply the traditional affordability safe harbors to their ICHRA offers:

W-2 Safe Harbor (Code 2F):

The employee's required contribution (Line 15 amount) times 12 must not exceed 9.02% of the employee's W-2 Box 1 wages. This is typically known after year-end.

Rate of Pay Safe Harbor (Code 2H):

The employee's required contribution must not exceed 9.02% of the employee's monthly rate of pay (hourly rate x 130 hours for hourly employees, or monthly salary for salaried employees).

Federal Poverty Line Safe Harbor (Code 2G):

The employee's required contribution must not exceed 9.02% of the federal poverty line for a single individual divided by 12. For 2025, this threshold is approximately $110 per month ($15,060 x 9.02% / 12).

Example 12: Testing ICHRA Affordability

An employer offers $450/month ICHRA. The lowest-cost silver plan is $575/month. The employee's required contribution is $125/month. Testing against the federal poverty line safe harbor: $15,060 x 9.02% / 12 = $113.20/month. Since $125 exceeds $113.20, the FPL safe harbor does not apply. The employer would need to use a different safe harbor or accept potential liability if the employee claims premium tax credits.

Penalties for Non-Compliant ICHRA Reporting

Incorrect 1095-C ICHRA reporting can result in several types of penalties:

Section 4980H(a) Penalty:

If an ALE fails to offer MEC to at least 95% of full-time employees and any employee receives a premium tax credit, the penalty is $2,970 per full-time employee per year (minus 30) for 2025. A properly documented ICHRA offer avoids this penalty.

Section 4980H(b) Penalty:

If an ALE offers coverage that is not affordable or does not provide minimum value, and an employee receives a premium tax credit, the penalty is $4,460 per employee who receives a credit for 2025. An affordable ICHRA avoids this penalty.

Information Return Penalties:

Failure to file accurate Forms 1095-C can result in penalties of $330 per return for 2025, up to $3,987,000 maximum. These penalties increase for intentional disregard.

Frequently Asked Questions About 1095-C ICHRA Reporting

What codes do I use on Form 1095-C for ICHRA?

For 1095-C ICHRA reporting, use codes 1L through 1Q on Line 14 depending on who is covered under your ICHRA design. Code 1L indicates employee-only ICHRA, 1N indicates ICHRA covering employee, spouse, and dependents, and 1P indicates conditional offers. Line 15 shows the employee's required contribution after subtracting the ICHRA amount from the lowest-cost silver plan premium. Line 16 uses standard codes like 2C for enrolled employees or safe harbor codes 2F, 2G, or 2H.

How do I calculate the amount for Line 15 with an ICHRA?

To calculate Line 15 for ICHRA, subtract your monthly ICHRA contribution from the lowest-cost silver plan premium available in the employee's primary residence location. If you're using the safe harbor, use the premium for a 21-year-old. For example, if the silver plan costs $500 and your ICHRA is $400, enter $100 on Line 15. If the ICHRA exceeds the silver plan cost, enter $0. This amount determines affordability under IRS rules.

Do I need to enter a ZIP code on Line 17 for ICHRA?

Yes, Line 17 is mandatory for 1095-C ICHRA reporting. You must enter the five-digit ZIP code of the employee's primary residence as of January 1 of the coverage year (or their start date if hired later). This ZIP code is essential because ICHRA affordability depends on the cost of silver plan coverage in the employee's specific location. Failure to include the ZIP code can result in IRS notices and potential penalties.

Can I use the federal poverty line safe harbor with ICHRA?

Yes, you can use the federal poverty line (FPL) safe harbor with ICHRA offers. Compare the employee's required contribution (Line 15 amount) to 9.02% of the FPL for a single individual divided by 12. For 2025, this threshold is approximately $113 per month. If Line 15 is at or below this amount, you can use code 2G on Line 16 to demonstrate affordability. This safe harbor provides certainty regardless of the employee's actual income.

What if an employee doesn't enroll in individual coverage?

If an employee declines your ICHRA offer and doesn't purchase individual health insurance coverage, you still report the offer on Form 1095-C. Use the appropriate ICHRA code on Line 14 (1L-1Q), enter the calculated required contribution on Line 15, but do not use code 2C on Line 16 since the employee didn't enroll. You may leave Line 16 blank or use a safe harbor code if applicable. The employee remains ineligible for premium tax credits if your offer was affordable.

How do I report ICHRA for an employee who changes locations?

For employees who move during the year, use the ZIP code from the employee's primary residence as of January 1 of the coverage year (or hire date if later) for the entire year. You do not need to update Line 17 mid-year if the employee relocates. This simplifies reporting and provides consistency. The affordability determination for the entire year is based on this original location.

Does ICHRA need to meet minimum value requirements?

No, unlike traditional group health plans, ICHRA does not need to meet the minimum value requirement (60% actuarial value). The Section 4980H(b) penalty analysis for ICHRA focuses solely on affordability. If your ICHRA offer is affordable based on the employee's required contribution for the lowest-cost silver plan, you avoid the 4980H(b) penalty even though minimum value isn't technically met in the traditional sense.

Can I offer different ICHRA amounts to different employees?

Yes, employers can offer different ICHRA amounts to different employee classes based on objective criteria such as full-time vs. part-time status, geographic location, job category, or age. However, you cannot vary amounts based on health status, and you must offer the same amount to all employees within a class. Each employee's Form 1095-C would reflect their specific ICHRA offer amount in the Line 15 calculation.

What happens if I make an error on ICHRA 1095-C reporting?

If you discover an error on a filed 1095-C ICHRA form, you should file a corrected Form 1095-C as soon as possible. Check the "CORRECTED" box on the form and provide the corrected information. There's no penalty for filing corrections if the original error was not due to intentional disregard. BoomTax allows unlimited corrections at no additional cost, making it easy to fix mistakes promptly.

Do I report ICHRA on Form 1095-B as well?

No, ICHRA offers are reported only on Form 1095-C, not on Form 1095-B. Form 1095-B is used by insurance providers and small employers offering self-insured coverage to report minimum essential coverage. ALEs report ICHRA offers on Form 1095-C, which serves as both the coverage offer report and, for self-insured plans, the coverage enrollment report. The difference between 1095-B and 1095-C relates to employer size and plan type.

When are 1095-C forms due for ICHRA reporting?

For tax year 2025, employee copies of Form 1095-C must be provided by March 3, 2026. Forms must be filed with the IRS by March 31, 2026 if filing electronically (which is required for ALEs filing 10 or more forms). Paper filing, if permitted, is due February 28, 2026. These deadlines apply to all Form 1095-C filings, including those reporting ICHRA offers.

How does ICHRA affect employees' premium tax credit eligibility?

When an employer offers an affordable ICHRA, employees generally cannot claim premium tax credits for marketplace coverage. The employee must either accept the ICHRA or purchase marketplace coverage without subsidies. If the ICHRA is not affordable, the employee can decline it and may be eligible for premium tax credits. Proper 1095-C ICHRA reporting helps the IRS determine whether employees were eligible for credits.

How BoomTax Simplifies 1095-C ICHRA Reporting

Accurately reporting 1095-C ICHRA offers requires tracking multiple data points and performing location-specific calculations. BoomTax streamlines this process with features designed specifically for ICHRA reporting:

  • ICHRA-specific data import: Upload ICHRA contribution amounts, employee locations, and coverage details through our Excel templates or direct integration with your benefits administration system
  • Automatic Line 15 calculations: BoomTax can help you calculate employee required contributions based on your ICHRA amounts and location-based silver plan premiums
  • Comprehensive code validation: Our system validates that you're using the correct 1L-1Q offer codes and corresponding Line 16 codes for ICHRA scenarios
  • ZIP code verification: Ensure Line 17 is properly populated for all ICHRA offers with built-in validation
  • Affordability testing: Apply safe harbors to verify your ICHRA offers meet affordability requirements
  • Multi-class support: Easily manage different ICHRA amounts for different employee classes within a single filing
  • Bulk processing: Import thousands of ICHRA records and generate accurate 1095-C forms at scale
  • Unlimited corrections: Fix any reporting errors at no additional charge
  • Employee delivery: Print and mail or electronically deliver 1095-C forms to employees
  • IRS e-filing: Transmit directly to the IRS through our authorized e-file system

Whether you're offering ICHRA to a small workforce or managing ICHRA reporting for thousands of employees across a controlled group, BoomTax provides the tools you need for accurate, efficient 1095-C ICHRA compliance.

Ready to simplify your ICHRA reporting? Get started with BoomTax today and experience stress-free ACA compliance for your Individual Coverage HRA.

Conclusion: Mastering 1095-C ICHRA Reporting

Proper 1095-C ICHRA reporting is essential for ALEs offering Individual Coverage Health Reimbursement Arrangements to their employees. The key takeaways from this guide include:

  • Use the correct Line 14 codes: Codes 1L through 1Q are specifically designed for ICHRA offers, with the specific code depending on who is covered under your ICHRA
  • Calculate Line 15 accurately: Subtract your ICHRA contribution from the lowest-cost silver plan premium in the employee's location; enter $0 if the ICHRA exceeds the premium
  • Always complete Line 17: The employee's primary residence ZIP code is mandatory for ICHRA reporting and determines affordability calculations
  • Understand affordability rules: ICHRA affordability uses the silver plan methodology, and traditional safe harbors can still apply
  • Document your decisions: Maintain records of ICHRA amounts, location-based premium data, and affordability determinations
  • File on time: Meet the March 31 electronic filing deadline and provide employee copies by March 3

ICHRAs offer employers a flexible, cost-predictable alternative to traditional group health plans while satisfying ACA requirements when properly designed and reported. By following the guidance in this article and using reliable ACA reporting software, you can confidently report your ICHRA offers on Form 1095-C and avoid costly penalties.

References and Additional Resources

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