For an ICHRA, Form 1095-C Line 15 generally reports the employee's monthly required contribution, calculated as the Lowest-Cost Silver Plan (LCSP) premium minus the employee's monthly ICHRA allowance.
What is reported on Line 15?
Line 15 reports the employee's required monthly contribution for the lowest-cost self-only coverage available to the employee.
For ICHRA reporting, this amount is used to determine whether the employer's offer of coverage meets ACA affordability requirements.
Line 15 is reported even if the employee:
Declined the ICHRA
Enrolled elsewhere
Purchased Marketplace coverage
Did not enroll in any health plan
When is Line 15 required?
Line 15 is generally completed when an Applicable Large Employer (ALE) reports an offer of health coverage requiring an employee contribution.
For ICHRA reporting, employers should follow IRS Form 1095-C instructions and applicable affordability guidance when determining whether Line 15 is required for a given month.
How is Line 15 calculated for an ICHRA?
The general formula is:
Employee Required Contribution = Lowest-Cost Silver Plan (LCSP) Premium − Monthly ICHRA Allowance
The resulting amount represents the employee's required monthly contribution for affordability testing and ACA reporting purposes.
If the calculation results in a negative number, employers should follow applicable IRS reporting guidance.
What is the Lowest-Cost Silver Plan (LCSP)?
The LCSP is the lowest-cost self-only silver plan available to the employee for the applicable month.
The LCSP varies based on:
Employee age
Employee residence location or approved worksite location
Plan year
Marketplace availability
Because these factors vary, employees with identical ICHRA allowances may have different Line 15 amounts.
Which location should be used for the LCSP calculation?
ICHRA affordability rules generally allow employers to use either:
The employee's primary residence location, or
The employee's assigned worksite location
The methodology should be applied consistently and in accordance with IRS regulations.
How does Line 15 affect ACA affordability testing?
The IRS uses the employee required contribution reported on Line 15 to determine whether the employer's offer of coverage is affordable.
If the employee's required contribution exceeds the applicable annual affordability threshold, the ICHRA may be considered unaffordable for that employee.
Affordability determinations can impact:
Employer Shared Responsibility Payment (ESRP) exposure
Marketplace premium tax credit eligibility
ACA reporting compliance
Why do employees have different Line 15 amounts?
Line 15 amounts often vary among employees because individual market premiums vary.
Differences may result from:
Age
Geographic rating area
Residence location
Worksite location
Monthly ICHRA allowance amount
This variation is normal and expected in an ICHRA.
What information is required to calculate Line 15?
To calculate Line 15 accurately, employers generally need:
Employee age
Employee residence or worksite location
Monthly ICHRA allowance amount
Applicable Marketplace LCSP data
Take Command uses this information to support affordability calculations and ACA reporting.
What should employers do if a Line 15 value appears incorrect?
If a Line 15 value appears incorrect:
Verify the employee's age for the reporting month.
Verify the employee's residence or worksite location.
Confirm the employee's monthly ICHRA allowance.
Review the applicable LCSP data.
Determine whether a correction to ACA reporting is necessary.
Employers should consult their benefits administrator, compliance advisor, or tax professional if they believe a correction may be required.
Does Take Command provide tax or legal advice?
No.
Take Command provides tools and reporting support but does not provide legal, tax, or accounting advice.
Employers should consult qualified legal counsel, tax advisors, or compliance professionals regarding ACA reporting obligations and affordability determinations.