Updated October 17, 2026. Quick answer: Codes 1L to 1U on Form 1095-C line 14 describe an offer of an individual coverage HRA instead of a group plan. The letter tells you who was offered it and which ZIP code the employer used to test affordability, and line 17 repeats that ZIP code. Code 1R means the HRA was not affordable, and code 1S means it was offered to someone who was not a full-time employee.
What an individual coverage HRA is
The instructions define the arrangement: “An HRA is a type of account-based health plan that employers can use to reimburse employees for their medical care expenses.” They continue: “An individual coverage HRA is an HRA integrated with individual health insurance coverage or Medicare, subject to certain conditions.” In the Definitions section there is also a classification for the reporting side: “individual coverage HRA is a self-insured group health plan and an eligible employer sponsored plan.”
That last sentence is why an individual coverage HRA can appear with Part III of the form, discussed on the Part III and line 17 page. The Form 1095-B instructions say the same: “Generally, an HRA, including an individual coverage HRA, is a self-insured group health plan.” Form 1095-B is covered on the Form 1095-B explained page.
The codes, one by one
Each row below is the filer instructions’ description of the code. The recipient wording on the form is close to it, with “you” in place of “employee”.
| Code | What the instructions say |
|---|---|
| 1L | “Individual coverage HRA offered to employee only with affordability determined by using employee’s primary residence location ZIP code.” |
| 1M | “Individual coverage HRA offered to employee and dependent(s) (not spouse) with affordability determined by using employee’s primary residence location ZIP code.” |
| 1N | “Individual coverage HRA offered to employee, spouse, and dependent(s) with affordability determined by using employee’s primary residence location ZIP code.” |
| 1O | “Individual coverage HRA offered to employees only using the employee’s primary employment site ZIP code affordability safe harbor.” |
| 1P | “Individual coverage HRA offered to employee and dependent(s) (not spouse) using the employee’s primary employment site ZIP code affordability safe harbor.” |
| 1Q | “Individual coverage HRA offered to employee, spouse, and dependent(s) using employee’s primary employment site ZIP code affordability safe harbor.” |
| 1R | “Individual coverage HRA that is NOT affordable offered to employee; employee and spouse, or dependent(s); or employee, spouse, and dependents.” |
| 1S | “Individual coverage HRA offered to an individual who was not a full-time employee.” |
| 1T | “Individual coverage HRA offered to employee and spouse (not dependents) with affordability determined using employee’s primary residence location ZIP code.” |
| 1U | “Individual coverage HRA offered to employee and spouse (not dependents) using employee’s primary employment site ZIP code affordability safe harbor.” |
The table reads in three groups. Codes 1L, 1M and 1N use the employee’s home ZIP code. Codes 1O, 1P and 1Q use the work location ZIP code instead. Codes 1T and 1U cover an offer to the employee and spouse, one for each ZIP code choice. Within a group, the letter tells you who the HRA was offered to: the employee only, the employee and dependents, or the employee, spouse and dependents.
Which ZIP code, and why it matters
Two ways to test affordability appear in the descriptions. The first is the home address. The second is a work location safe harbor, which the instructions describe: “For purposes of section 4980H(b), an employer may use the cost of self-only coverage for the lowest cost silver plan for the employee for self-only coverage offered through the Exchange where the employee’s primary site of employment is located for determining whether an offer of an individual coverage HRA to a full-time employee is affordable.” And: “The ZIP code for the employee’s primary site of employment is used to identify the applicable lowest cost silver plan to determine affordability.”
The instructions add that the work location rule is one tool among several: “In addition to the location safe harbor for individual coverage HRAs, ALE Members may use the section 4980H affordability safe harbors to determine affordability for purposes of section 4980H(b) for an employee for the year.”
Line 17: the ZIP code your employer used
Line 17 is the line that records the choice. The recipient instructions say “This line reports the applicable ZIP code your employer used for determining affordability if you were offered an individual coverage HRA.” They pair each code with a location: “If code 1L, 1M, 1N, or 1T was used on line 14, this will be your primary residence location.” And: “If code 1O, 1P, 1Q, or 1U was used on line 14, this will be your primary employment site.”
The filer instructions say the same thing from the employer’s side: “If the ALE Member used code 1L, 1M, 1N, 1O, 1P, 1Q, 1T, or 1U because it offered the employee an individual coverage HRA, enter the appropriate ZIP code used for identifying the lowest cost silver plan used to calculate the Employee Required Contribution in line 15.” Codes 1R and 1S do not appear in that list. The line 17 page is Part III and line 17.
Line 15 for an HRA
The line 15 amount for these codes follows a special formula, described on the form: “For an individual coverage HRA, the employee required contribution is the excess of the monthly premium based on the employee’s applicable age for the applicable lowest cost silver plan over the monthly individual coverage HRA amount (generally, the annual individual coverage HRA amount divided by 12).” The codes that come with a line 15 amount include 1L, 1M, 1N, 1O, 1P, 1Q, 1T and 1U, from the list: “Line 15 will show an amount only if code 1B, 1C, 1D, 1E, 1J, 1K, 1L, 1M, 1N, 1O, 1P, 1Q, 1T, or 1U is entered on line 14.” Codes 1R and 1S are not on it. The general line 15 rules are on the line 15 page.
Here is a labelled illustration of that relationship, not an IRS example, with made-up numbers. Suppose the lowest cost silver plan’s monthly premium for your age is $600 and the annual HRA amount is $5,400. The monthly HRA amount is $5,400 divided by 12, which is $450 a month. The excess of the premium over that is $600 minus $450 gives $150. A line 15 amount in this pattern would be $150 in the month. The real inputs are your employer’s, and the form will show only the resulting amount.
Code 1R: the HRA that is not affordable
Code 1R is the one that says the HRA did not clear the affordability test. The instructions also say when an HRA counts for minimum value: “An individual coverage HRA that is affordable is treated as providing minimum value.” Code 1R is described separately from the other HRA codes as an individual coverage HRA that is not affordable. The line 17 instructions name codes 1L, 1M, 1N, 1O, 1P, 1Q, 1T and 1U for a ZIP code, and 1R is not among them.
Code 1S: not a full-time employee
Code 1S covers the HRA offered to someone outside the full-time group. The wording is “Individual coverage HRA offered to an individual who was not a full-time employee.” For other non-full-time enrollees in self-insured plans, the form uses a separate code that is described on the codes 1F, 1G and 1H page.
How your line 14 boxes read with these codes
Line 14 sits in Part II of the form, which carries the heading “Employee Offer of Coverage”. On the form you will see one box marked “All 12 Months” and then twelve monthly boxes. The filer instructions explain how those boxes are meant to be filled: “For each calendar month, enter the applicable code from Code Series 1.” They add that “you may enter the applicable code in the “All 12 Months” box and not complete the individual calendar month boxes”, and also that “you may enter the code in each of the boxes for the 12 calendar months.” So a code in the All 12 Months box and the same code in all twelve monthly boxes are two ways of saying the same thing.
With these codes, a switch between letters across the monthly boxes means the HRA offer changed, for example who it reached or which ZIP code set affordability. The rule that requires a code in every month applies here as well: “A code must be entered for each calendar month, January through December, even if the employee was not a full-time employee for 1 or more of the calendar months.” Line 17 is one ZIP code box, so read it with the box you are interested in.
What it means for your return
The form says “The information on line 14 relates to eligibility for coverage subsidized by the premium tax credit for you, your spouse, and dependent(s).” The affordability yardstick the instructions cite is the indexed percentage, and the page ACA affordability percentage 2026 covers it on this site. For income planning, see managing MAGI for ACA subsidies, and for the credit worksheet side see the ACA subsidy calculator. The full set of Form 1095 pages starts at Form 1095 explained.
Edition and tax year
The 2025 forms and instructions were the ones read for this page. They were the current files on irs.gov on 2026-10-17, and they cover coverage in calendar year 2025, furnished in early 2026. The year is printed on the form you received, so check it before you rely on any line of this page.
Common mistakes
- Expecting a ZIP code on line 17 for every HRA code. The instructions limit it to “code 1L, 1M, 1N, 1O, 1P, 1Q, 1T, or 1U”.
- Reading the ZIP code on line 17 as your mailing address. The form says it is the ZIP code “your employer used for determining affordability”.
- Treating line 15 as the HRA amount itself. The form defines it as “the excess of the monthly premium based on the employee’s applicable age for the applicable lowest cost silver plan over the monthly individual coverage HRA amount”.
Related: ACA affordability percentage 2026, Managing MAGI for ACA subsidies, ACA subsidy calculator, and HSA after leaving your employer.
Sources
- Form 1095-C (2025), Employer-Provided Health Insurance Offer and Coverage: https://www.irs.gov/pub/irs-pdf/f1095c.pdf
- 2025 Instructions for Forms 1094-C and 1095-C: https://www.irs.gov/pub/irs-pdf/i109495c.pdf
- 2025 Instructions for Forms 1094-B and 1095-B: https://www.irs.gov/pub/irs-pdf/i109495b.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.