ACA Forms 1094 and 1095: 2026 Reporting Guide for Texas Employers

Forms 1094 and 1095 are annual Affordable Care Act information returns, but not every employer files the same version. The correct form depends on two separate facts: whether the employer is an Applicable Large Employer, or ALE, and whether the plan is fully insured or self-insured. Using funding type alone to select a form is a common mistake.

This guide covers 2025 health coverage reported in 2026. IRS forms, instructions, filing systems, relief, and penalty amounts can change. Verify the current-year instructions before transmitting returns or advising an employee.

First determine ALE status across related employers

An employer is generally an ALE for a calendar year if it averaged at least 50 full-time employees, including full-time equivalents, during the prior calendar year. Full-time status and full-time equivalents are calculated under ACA rules, not simply from the number enrolled in medical coverage.

Related companies under controlled-group or affiliated-service-group rules are generally aggregated to decide whether the 50-employee threshold is met. After that determination, each company that employs workers is treated as an ALE member and generally files its own Forms 1094-C and 1095-C. One parent-company filing does not automatically satisfy every member's duty.

Ownership changes, acquisitions, new employers, seasonal-worker facts, and payroll systems split among entities deserve review before year-end. Our guide to small- and large-group health insurance explains why the Texas insurance-market threshold is a different calculation.

ALEs use Forms 1094-C and 1095-C

Form 1095-C reports monthly information about an ALE member's offer of employer-sponsored coverage to an employee. It includes offer-of-coverage codes, the employee's required contribution for the lowest-cost applicable option, and other codes that explain the employer's treatment for each month. An ALE member generally prepares a 1095-C for every employee who was full-time for at least one month, even if that employee declined coverage.

Form 1094-C transmits the employer's 1095-C forms and reports employer-level information. One 1094-C is marked authoritative for each ALE member. If the member submits multiple transmissions, the authoritative transmittal reports the total employee count and other required data for that member.

A fully insured ALE completes the offer information on Form 1095-C; the insurance carrier separately reports enrolled individuals on Form 1095-B. A self-insured ALE also completes Part III of Form 1095-C to report each individual enrolled in its minimum essential coverage. It generally does not use Form 1095-B for the same employees merely because the plan is self-insured.

Non-ALE self-insured employers use B forms

An employer that is not an ALE but sponsors a self-insured plan generally reports enrolled individuals on Forms 1094-B and 1095-B. Form 1095-B identifies the responsible individual and covered people by month; Form 1094-B is the transmittal sent to the IRS.

A non-ALE employer offering only fully insured coverage generally does not file Forms 1094-B and 1095-B for that coverage because the carrier reports enrollment. The employer may still have state reporting or other benefit obligations. A multiemployer plan, government plan, or other coverage provider can involve different reporting responsibility, so confirm who is the reporting entity.

2026 deadline calendar for 2025 coverage

• January and February 2026: Reconcile payroll, enrollment, dependent data, Social Security numbers or dates of birth where permitted, affordability inputs, and employer entity information.
• March 2, 2026: General deadline to furnish Forms 1095-C or 1095-B to individuals. The ordinary January 31 date receives an automatic 30-day extension under current regulations, landing on March 2 for this cycle.
• March 2, 2026: General paper-filing deadline when paper filing is permitted, because February 28 falls on a weekend.
• March 31, 2026: General deadline to file electronically with the IRS.
• After filing: Review IRS acknowledgments and error reports promptly, furnish corrected statements when required, and retain support for the codes and corrections.

An employer that cannot file on time should review the current extension procedures before the original deadline. An extension to file with the IRS does not automatically extend the date to furnish employee statements. State information-return deadlines can also differ.

Electronic filing now reaches many smaller filers

Electronic filing is generally required when a filer submits 10 or more information returns in aggregate during the calendar year. The count combines covered return types rather than applying a separate 10-return threshold to each form. W-2s, 1099s, and ACA returns can therefore put an employer over the threshold even when it has fewer than 10 Forms 1095.

ACA returns are filed through the IRS Affordable Care Act Information Returns system, commonly called AIR, using an approved transmitter or compatible vendor process. Do not wait until March to learn whether the payroll company, benefits administrator, tax adviser, or employer will transmit. Assign responsibility in writing and preserve submission receipts.

Build a corrected-return workflow before filing

IRS acceptance does not mean every data element was correct. Download and review the acknowledgment, including any error file. Separate transmission errors from record-level errors and determine whether the issue affects Form 1094 or 1095. Common problems include name and taxpayer-identification-number mismatches, an incorrect employer identification number, missing full-time employees, wrong monthly offer codes, or incomplete self-insured enrollment data.

1. Compare the error with payroll, enrollment, and plan records. Do not overwrite the original source without documenting the reason.
2. Use the current IRS instructions to prepare the corrected return and mark it correctly. The steps differ for a 1094 transmittal error and a 1095 employee-statement error.
3. Furnish a corrected statement to the individual when required.
4. Transmit through the proper channel and confirm that the correction is accepted.
5. Keep the original filing, acknowledgment, corrected filing, delivery record, and explanation of the change.

If an employee questions a code or premium amount, investigate against the plan and payroll records instead of changing the form solely to match the employee's expectation.

Coordinate coverage and reporting data throughout the year

Accurate annual reporting starts with monthly administration. Record hire and termination dates, full-time measurement results, waiting periods, offers, waivers, employee contributions, COBRA enrollment, dependents, and plan funding. Reconcile carrier or administrator enrollment with payroll at least before year-end. The HR compliance services page describes how PCI Solutions supports the benefits side of that process.

For self-insured plans, make sure the reporting vendor receives covered spouse and dependent data rather than only an employee census. For an aggregated ALE group, maintain a legal-entity map, employer identification numbers, and employee assignments. Each member's authoritative 1094-C should agree with the set of 1095-C forms filed under that member.

Verify instructions, penalties, and vendor responsibilities

Failure to file correct returns and failure to furnish correct statements are separate penalty categories. Amounts are indexed and can change each year; intentional-disregard rules are more severe. Reasonable-cause standards depend on facts and documentation. Do not reuse an old penalty amount or assume a correction automatically removes exposure.

Before filing, verify the 2025 Forms 1094-B, 1095-B, 1094-C, and 1095-C instructions, current AIR publications, applicable extensions, and any alternative furnishing rules. Review related obligations in the ACA timeline and confirm tax or legal conclusions with the appropriate adviser.

Primary Care Insurance Solutions can help Houston employers coordinate plan, carrier, and enrollment information with their reporting vendors. The employer and its tax or legal advisers remain responsible for selecting the filing position and confirming current IRS requirements.