This information is not tax or legal advice. Employers are encouraged to read the instructions and forms in their entirety and work with trusted advisers to prepare any IRS documents.
The IRS has created two sets of ACA codes to provide employers with a consistent way to describe their medical benefit offerings to their employees. Each code indicates a different scenario regarding an offer of coverage, or explains why an employer should not be subject to a penalty for an employee, for each month.
Line 14 series 1 codes
| wdt_ID | Series 1 Code | IRS Description | When/How this code is utilized |
|---|---|---|---|
| 1 | 1A |
Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time employee with Employee Required Contribution equal to or less than 9.5% (as adjusted) of mainland single federal poverty line and at least minimum essential coverage offered to spouse and dependent(s). |
Employee is eligible for at least one plan that meets all of the following criteria: 1. Plan offered is minimum essential coverage 2. Employee only coverage offered is affordable by the federal poverty line 3. Coverage is also offered to spouse and dependent(s) |
| 2 | 1B |
Minimum essential coverage providing minimum value offered to employee only. |
Minimum essential coverage is only offered to the employee and no other dependents. This code often appears in COBRA offers of coverage. |
| 3 | 1C |
Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse). |
Minimum essential coverage is only offered to the employee and their child dependents. This code often appears in COBRA offers of coverage. |
| 4 | 1D |
Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)). Do not use code 1D if the coverage for the spouse was offered conditionally. |
Minimum essential coverage is only offered to the employee and their spouse. This code often appears in COBRA offers of coverage. |
| 5 | 1E |
Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse. Do not use code 1E if the coverage for the spouse was offered conditionally. Instead, use code 1K. |
Employee is eligible for at least one plan that meets all of the following criteria: 1. Plan offered is minimum essential coverage 2. Employee only coverage offered is affordable by rate of pay or W2 earnings, not the federal poverty line 3. Coverage is also offered to spouse and dependent(s) |
| 6 | 1F |
Minimum essential coverage NOT providing minimum value offered to employee; employee and spouse or dependent(s); or employee, spouse, and dependents |
Employee is eligible for a plan that meets minimum essential coverage but the plan design does not meet minimum value. |
| 7 | 1G |
Offer of coverage for at least one month of the calendar year to an individual who was not an employee for any month of the calendar year or to an employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in self-insured coverage for one or more months of the calendar year. |
A self-insured plan was offered to an eligible employee and one of the following scenarios occurred: 1. New hire enrolled in coverage during their initial measurement period for at least one month (full or partial) of the year 2. Employee is categorized as 'not full time' and enrolled in self-insured coverage for at least one month (full or partial) of the year 3. COBRA/Retiree enrolled in self-insured coverage at least one month (full or partial) of the year and was never considered a full time employee during that year |
| 8 | 1H |
No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage, which may include one or more months in which the individual was not an employee). |
No offer of coverage was made for a given month which could include the following scenarios: 1. Employee was not yet offered coverage 2. Employee has been terminated 3. Coverage offered did not meet minimum essential coverage 4. Coverage was offered but not for the entire month |
| 9 | 1I |
Reserved. |
Not applicable for the current tax year |
| 10 | 1J |
Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage conditionally offered to spouse; minimum essential coverage not offered to dependent(s). |
Employee is eligible for at least one plan that meets all of the following criteria: 1. Plan offered is minimum essential coverage 2. Plan offered is minimum essential value 3. Coverage is offered to the spouse conditionally (i.e. spouse is unable to enroll based on their offer of coverage elsewhere) 4. No coverage was offered to child dependents |
Line 16 series 2 codes
| wdt_ID | Series 2 Code | IRS Description | When/How this code is utilized |
|---|---|---|---|
| 1 | 2A |
Employee not employed during the month. Enter code 2A if the employee was not employed on any day of the calendar month. Do not use code 2A for a month if the individual was an employee of the ALE Member on any day of the calendar month. Do not use code 2A for the month during which an employee terminates employment with the ALE Member. |
1. Employee has not yet been hired 2. Employee has been terminated |
| 2 | 2B |
Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in minimum essential coverage, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage ended before the last day of the month solely because the employee terminated employment during the month. |
1. Employee has a 'not full time' shared responsibility status 2. Employee has terminated with coverage ending mid-month 3. Coverage begins mid-month in a non new hire scenario |
| 3 | 2C | Employee enrolled in health coverage offered. Enter code 2C for any month in which the employee enrolled for each day of the month in health coverage offered by the ALE Member, regardless of whether any other code in Code Series 2 might also apply (for example, the code for a section 4980H affordability safe harbor) except as provided below. Do not enter code 2C on line 16 for any month in which the multiemployer interim rule relief applies (enter code 2E). Do not enter code 2C on line 16 if code 1G is entered in line 14. Do not enter code 2C on line 16 for any month in which a terminated employee is enrolled in COBRA continuation coverage or other post-employment coverage (enter code 2A). Do not enter code 2C on line 16 for any month in which the employee enrolled in coverage that was not minimum essential coverage. | Employee is enrolled in medical coverage for the entire month |
| 4 | 2D |
Employee in a section 4980H(b) Limited Non-Assessment Period. Enter code 2D for any month during which an employee is in a section 4980H(b) Limited Non-Assessment Period. If an employee is in an initial measurement period, enter code 2D (employee in a section 4980H(b) Limited Non-Assessment Period) for the month, and not code 2B (employee not a full- time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the ALE Member is also eligible for the multiemployer interim rule relief for the month, enter code 2E (multiemployer interim rule relief) and not code 2D (employee in a section 4980H(b) Limited Non-Assessment Period). |
1. Employee is in a measurement or administrative period associated with an off-cycle measurement period and is not enrolled 2. Employee is between hire date and benefit effective date as defined in new hire or re-hire rules (i.e. newly eligible waiting period) |
| 5 | 2E | Multiemployer interim rule relief. Enter code 2E for any month for which the multiemployer arrangement interim guidance applies for that employee, regardless of whether any other code in Code Series 2 (including code 2C) might also apply. | Employee is eligible for a multiemployer (union) plan |
| 6 | 2F | Section 4980H affordability Form W-2 safe harbor. Enter code 2F if the ALE Member used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an ALE Member uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage. | The winning safe harbor method from the affordability category is W-2 earnings for the for the employee's designated FEIN |
| 7 | 2G | Section 4980H affordability federal poverty line safe harbor. Enter code 2G if the ALE Member used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). | The winning safe harbor method from the affordability category is the federal poverty line for the for the employee's designated FEIN |
| 8 | 2H | Section 4980H affordability rate of pay safe harbor. Enter code 2H if the ALE Member used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). | The winning safe harbor method from the affordability category is rate of pay for the for the employee's designated FEIN |