ACA Codes Cheat Sheet: What Every Employer Needs to Know
The High Stakes Behind a Few Little Boxes
On the surface, ACA codes seem simple. Just a few entries on IRS Form 1095-C. But as most HR practitioners know, it’s anything but. For employers, getting those codes wrong can mean steep penalties, rejected filings, and unnecessary stress during an already demanding season.
That’s because those little numbers do a lot of heavy lifting. They tell the IRS if you offered health coverage, whether that coverage was affordable, and whether you’ve met your employer mandate responsibilities under the Affordable Care Act. A single incorrect code can flag your organization for noncompliance, even if you did everything right.
If you’ve ever found yourself tearing your hair as you Google “what does code 1A mean on line 14?” while toggling between spreadsheets and IRS instructions, you’re not alone. ACA 1095 codes aren’t intuitive. With the end of good-faith relief and employers now required to e-file when submitting 10 or more information returns, the margin for error is now even smaller.
That’s why we created this ACA codes cheat sheet.
This guide breaks down everything you need to know about ACA reporting codes, from the meaning of lines 14, 15, and 16 to common mistakes and examples of how to code real-world employee situations. Along the way, we’ll show you how Selerix can simplify ACA compliance, because compliance should never be checkbox roulette.
Let’s take the mystery (and the margin for error) out of ACA codes.
TL;DR: Your Quick ACA Codes Cheat Sheet
No time to dive into all the details? Here’s the quick-hit version of what every employer needs to know about ACA 1095 codes and ACA reporting:
- ACA codes are used on IRS Form 1095-C to indicate whether an employer offered coverage, what kind, and how it was handled.
- Line 14 (offer of coverage), Line 15 (employee share of cost), and Line 16 (safe harbors or special situations) are the three key sections of the form. Most ACA reporting mistakes happen here. Double-check before you file!
- ACA reporting codes – Using the wrong ones, or skipping them, can lead to rejected filings or IRS penalties.
- Code 1A is the most used offer of coverage code and indicates the employer made a Qualifying Offer.
- Code 2C indicates that an employee accepted coverage, while Code 2F, 2G, or 2H refer to affordability safe harbors.
- Key Reminders: Mandatory electronic filing , no more good-faith relief and updates on how ICHRA offers are reported.
Need a deeper overview of ACA rules? Check out this IRS 1095-C instructions page to see the official breakdown.
What Are ACA Codes?
ACA codes are a series of letter-and-number combinations used by employers to report health insurance coverage details to the IRS on Form 1095-C. These codes help the IRS determine whether you, as an applicable large employer (ALE), have complied with the Affordable Care Act’s employer mandate and whether any of your employees may be eligible for a premium tax credit.
You’ll find ACA 1095 codes primarily in three parts of the form:
- Line 14: Shows what type of health coverage (if any) was offered to the employee.
- Line 15: Reports the employee’s share of the lowest-cost, self-only monthly premium.
- Line 16: Explains why an employer should not be penalized, for example, if the employee wasn’t eligible or declined the offer.
Together, these lines form the backbone of ACA reporting. Using the correct ACA reporting codes is essential for IRS compliance and avoiding penalties under sections 4980H(a) and 4980H(b).
Understanding Lines 14, 15, and 16
When it comes to ACA 1095 codes, most of the action happens in Lines 14, 15, and 16 on IRS Form 1095-C. These three fields tell the full story of your health coverage offer: who got it, what it cost, and why you may or may not be subject to a penalty.
Here’s a quick breakdown:
| Line | What It Captures | Why It Matters |
| Line 14 | The type of coverage you offered (or didn’t) | Indicates whether you made a compliant offer under the ACA |
| Line 15 | The employee’s share of the premium for the lowest-cost self-only plan | Used to evaluate whether coverage was “affordable” under ACA rules |
| Line 16 | The reason you should or shouldn’t be penalized | Applies IRS “safe harbor” logic to your reporting |
Correctly completing these lines, using the right ACA reporting codes, is one of the most important (and most confusing) parts of ACA compliance. That’s why we’ve broken each one down, starting with Line 14.
And if you’re looking for expert guidance that reduces risk and streamlines the process, explore our Selerix ACA Compliance Services to see how we can help.
Line 14 Codes: What Type of Coverage You Offered
Line 14 on Form 1095-C requires you to enter a code that describes the type of health insurance coverage you offered to the employee, if any. These ACA codes help the IRS determine whether the coverage met Minimum Essential Coverage (MEC) and Minimum Value (MV) standards.
Here’s a simplified table of the most common ACA 1095 codes used on Line 14:
| Code | Meaning | When to Use It |
| 1A | Qualifying Offer: MEC that provides MV to the employee, spouse, and dependents with affordability | Use this when you offered robust, affordable coverage to the full family |
| 1E | MEC providing MV to employee, spouse, and dependents | Use when you met the minimum coverage standards for all |
| 1B | MEC for employee only (not spouse/dependents) | Use if coverage was offered to the employee alone |
| 1H | No offer of coverage or offer not qualifying as MEC | Use when no compliant offer was made that month |
| 1C, 1D, 1F | Variants involving partial offers or non-MV plans | Use with caution—often a flag for review |
| 1G | Offer of coverage to a non-employee (for example: COBRA participant, retiree, etc) | Used for retirees or terminated employees with COBRA |
Tip: 1A is often the safest and simplest code, but it can’t be used unless certain affordability and coverage requirements are met.
For a full list of codes and scenarios, including ICHRA-related codes, refer to the official IRS instructions.
Line 15: Reporting the Employee’s Share of Costs
Line 15 of Form 1095-C is all about affordability. While Line 14 shows what coverage you offered, Line 15 shows how much it cost the employee, specifically for the lowest-cost self-only MEC plan that provides minimum value.
Even if the employee enrolled in a different plan or added dependents, Line 15 should always reflect the self-only rate of your most affordable compliant option.
Here’s what to keep in mind:
| What to Report | How to Calculate It |
| Dollar amount (e.g., $102.34) | Monthly cost of the lowest-cost self-only plan offered, regardless of what plan the employee chose |
| Leave blank if Line 14 = 1A | If you use code 1A or 1G on Line 14, Line 15 should be left blank |
| Must reflect monthly, not annual, premium | Report this amount for each month or use all-12-month row if the cost was the same throughout the year |
This matters because the IRS uses this amount to determine whether the offer meets one of the ACA’s affordability thresholds, which change annually and differ by safe harbor method (we’ll cover that next).
Still calculating this manually? With Selerix, you don’t have to. Our ACA platform automatically performs the affordability calculation using your plan data and employee earnings, reducing manual entry and minimizing compliance risk.
Line 16 Codes: Safe Harbors and Special Situations
Line 16 provides context to help the IRS determine if a penalty is appropriate. These ACA codes signal special conditions, such as waiting periods, employee ineligibility, or use of a safe harbor that justified the offer made.
You can think of Line 16 as the “defense” line. It explains why you might not be liable for a penalty, even if the employee didn’t enroll.
Here’s a quick cheat sheet of common Line 16 codes:
| Code | Meaning | When to Use It |
| 2C | Employee enrolled in coverage | Use when the employee accepted your offer |
| 2F | Affordability safe harbor (W-2) | Use when affordability is determined by the employee’s W-2 wages |
| 2G | Affordability safe harbor (FPL) | Use if the plan met Federal Poverty Line affordability |
| 2H | Affordability safe harbor (Rate of Pay) | Use if affordability is based on an hourly or salaried rate of pay |
| 2D | Employee in a limited non-assessment period (e.g., waiting period) | Use for new hires or initial eligibility periods |
| 2E | Multiemployer interim rule relief | Use if union coverage is offered through a collective bargaining agreement |
| 2A | Employee not employed that month | Use for months the employee wasn’t on payroll |
| 2B | Employee not full-time or not employed all month | Use for variable-hour employees or part-time transitions |
Using the right Line 16 code can help you avoid penalties, especially in edge cases like leaves of absence, waiting periods, or variable schedules.
TIP: Incorrect or missing Line 16 codes are among the most common ACA reporting mistakes. Selerix helps ensure you never leave a justification blank when one exists.
Still unsure which code to choose? Selerix ACA tools can take the guesswork out of code selection. Our healthcare compliance solution is built to help you avoid costly errors and stay compliant—no spreadsheet acrobatics required.
2025 ACA Reporting Reminder
If you’ve reported ACA codes in the past, 2025 will bring some changes you’ll want to note, especially around filing requirements and timing. Here are the key ACA reporting updates every employer should know:
| Update | What It Means for You |
| Electronic filing is now mandatory | All employers filing 10+ returns must e-file. Paper forms are no longer accepted. |
| Alternative options for mailing | The Paper Reduction Act now allows employers different options for mailing forms. |
| Shorter deadlines for recipient delivery | While extensions may apply, plan ahead to send Form 1095-C to employees by early March. |
| Updated affordability threshold | For 2025, affordability is capped at 9.02% of household income (check IRS updates). |
| ICHRA-related codes expanded | If you offer an Individual Coverage HRA, make sure you’re using the latest reporting logic. |
Bottom line? The margin for error is shrinking. However, the tools for doing it right are continually improving. With Selerix healthcare compliance, you can meet new requirements with confidence and always have resources at your fingertips.
Want to go deeper? Check out our comprehensive Employer’s Guide to ACA Reporting for expert guidance on the full process.
Common Employer Scenarios (and How to Code Them)
ACA reporting isn’t just about knowing what the codes mean—it’s about knowing how to apply them. The following cheat sheet outlines common employer situations and illustrates how ACA codes typically apply.
While every case is unique, this chart gives a solid starting point:
| Scenario | Line 14 Code | Line 15 | Line 16 Code |
| Full-time employee accepted qualifying offer | 1A or 1E | Dollar amount (if not 1A) | 2C |
| Full-time employee declined qualifying offer | 1A or 1E | Dollar amount (if not 1A) | 2F, 2G, or 2H (safe harbor) |
| Employee in waiting period | 1H | Blank | 2D |
| Part-time employee, no offer required | 1H | Blank | 2B |
| Terminated (or retired) employee offered COBRA | 1H | Blank | 2A or 2B |
| Employee covered by union plan (multiemployer) | 1H | As applicable | 2E |
| New hire, not yet eligible | 1H | Blank | 2D |
| Employee enrolled in ICHRA | 1L, 1M, 1N, 1O, 1P, 1Q, 1S, 1T, or 1U (ICHRA-specific codes)* | Required | 2C (if enrolled) or 2H (safe harbor) |
*Note: Codes 1L–1U require Line 17 to report the ZIP Code used for ICHRA affordability
Most Common ACA Reporting Mistakes to Avoid
Even seasoned HR teams can make errors when navigating ACA 1095 codes, especially with last-minute data cleanups and shifting employee circumstances. Here are some of the most common (and costly) mistakes to watch out for:
- Incorrect Line 14–16 combinations
Certain code combos simply don’t make sense (like offering coverage but not including a safe harbor when an employee declines). Double-check against the IRS logic. - Leaving Line 15 blank when it should be filled
Line 15 is required unless you use Code 1A on Line 14. Omitting it can trigger a compliance flag. Line 15 is not required when using the 1G code under Line 14. - Using outdated or invalid codes
Codes change year to year, especially for ICHRA reporting. Be sure you’re using current IRS-approved codes only. - Failing to use safe harbor codes when applicable
If an employee declines coverage, you may still avoid penalties by applying a valid affordability safe harbor. Many employers miss this. - Misreporting waiting periods or new hires
The IRS expects to see 1H and 2D used correctly during limited non-assessment periods. Misreporting can create an audit trail. - Forgetting to code COBRAor Retirees correctly for terminated employees
Many mistakenly continue to report offers of coverage after employment ends. Use 1G or 1H as appropriate once the employee becomes a non-employee. - Manual errors due to spreadsheet-based reporting
It’s easy to transpose a code or leave a field blank, especially at scale. Most errors aren’t strategic; they’re copy/paste mistakes.
The good news? Most of these issues are avoidable with the right process and the right tools.
Stay Compliant with ACA Reporting Using Selerix
ACA reporting doesn’t have to be a season of stress and second-guessing. At Selerix, we help employers simplify ACA compliance from end to end—reducing risk, minimizing manual entry, and aligning your reporting with the most current IRS requirements.
With the elimination of good-faith relief and electronic filing now required for nearly all ALEs, accuracy matters more than ever. Our solution is built to help you:
- Automatically apply the correct ACA codes based on your plan setup and employee data
- Manage Line 14–16 logic without relying on custom spreadsheets
- Stay on top of evolving IRS rules and affordability thresholds
- Submit forms electronically with confidence
- Access year-round support and educational resources whenever you need them
Looking for more details and tools for ACA compliance? Visit the Selerix ACA Resource Studio for a curated collection of reporting tools, explainer videos, and downloadable resources, including our cheat sheet of ACA acronyms and definitions.
ACA Reporting Doesn’t Have to Be Complicated. From code confusion to compliance stress, Selerix helps you handle ACA reporting the smarter way. Get ACA Compliance Help
