Toast Payroll: ACA and Form 1095-C FAQ

In this Article:

ACA and ALE

• What is the ACA?
• What does the ACA module do?
• How does Toast Payroll help me manage the ACA throughout the year?
• What is needed to set up to offer benefits and record elections?
• What is needed to set up the module for ongoing reporting?
• What is an Applicable Large Employer (ALE)?
• I am an ALE. How does Toast Payroll help me manage the ACA?

Forms

• What is Form 1094-C?
• What is Form 1095-C?
• When are Form 1095-C's sent?
• Who receives a Form 1095-C?
• How do individuals receive Form 1095-Cs?
• Am I required to send my employees Form 1095-Cs?
• What happens if I fail to file the 1095-C/1094-C forms?
• Will employees be able to view an electronic copy of Form 1095-C in Toast Payroll?
• What information is shown on a Form 1095-C?
• What if an employee notices an error on Form 1095-C?
• Where can I view an employee's ACA filing information?
• What is a 1095-B form?

What is the ACA?

The ACA (short for the Affordable Care Act) is a federal health care reform law that was passed in 2010. The ACA aims to provide affordable health insurance, expand the Medicare program, and support medical care delivery methods.

Employers need to be especially mindful of two of the ACA's provisions:

• • • Note: These two provisions only apply to employers who meet the IRS criteria of an Applicable Large Employer (ALE).
    • The Employer Shared Responsibility Provision. Often called the "Pay or Play Provision" or "Employer Mandate" requires employers with 50 or more full-time employees, including full-time equivalent employees (FTEs) to either:
      • Offer minimum essential coverage that is "affordable" and that provides "minimum value" to their full-time employees (and their dependents).
        • Affordability - the IRS has provided three safe harbors that employees can use to define affordability
          • Employee rate of pay
          • Federal poverty line
          • W-2 wages
        • Minimum value - an employer-sponsored plan provides minimum value if it covers at least 60% of the total allowed cost of benefits that are expected to be included under the plan (considering deductibles, copays and insurance) 
      • Or potentially make an employer shared responsibility payment to the IRS.
    • Employer Information Reporting Provision (watch the short video below for information on these two employer responsibilities).

Watch this short video and review FAQs below to learn more about ACA filing.

What does the ACA module do?

The ACA module’s ongoing features track and determine employees who have worked enough hours on average to be considered by law eligible for medical coverage and allows employers to offer these employees coverage.

Tracking and offering benefits to eligible employees maintains compliance with the ACA. Doing so in Toast Payroll maintains the necessary inputs to determine the coding for forms 1095-C and 1094-C minimizing the amount of manual work you must do when it comes time to file. 

How does Toast Payroll help me manage the ACA throughout the year

Toast Payroll has both the payroll data that is needed to determine who to offer coverage to and can match that with our benefits feature so you can offer coverage to applicable employees. Through the module, you can:

1. 1. 1. Calculate if your company is considered an Applicable Large Employer (ALE) based on the number of full-time or full-time equivalent (FTE) employees over time
      2. Track hours worked through Toast Payroll
      3. Report "on average" hours worked through the ACA feature
      4. Use those reports to determine full time employees that are eligible for benefits per the ACA
      5. Offer medical coverage to those eligible employees
      6. Have a record that you offered coverage to an employee and their election through the benefits feature

What is needed to set up to offer benefits and record elections? 

Once you have determined who to offer coverage to, you can offer coverage to those employees through the benefits feature. 

Benefits Feature Set Up

The Benefits module must be set up with any that your company has. A benefit tier contains all the details of your benefit offer to an employee. For example, a company that has a different set of benefits or prices for Managers/Executive may have a Manager tier separate from their Standard offering. These tiers should include any applicable healthcare benefits for eligible employees. 

Employee Offer of Coverage

Benefits can be offered to employees through the ACA module as they become eligible. If the reporting calculates someone eligible for benefits, you can update the employee's benefit tier by navigating to Benefits > View and manage health benefits > ACA Reporting. In the Look-back Measurement Tracking and Coverage Eligibility Determination section, select the FEIN and ACA Tier, then choose the Ongoing Alerts version of the report. Select View to see the results on the screen. Select the Offer Coverage button to the left of the employee and change the dropdown to the applicable Benefit Tier. Change the tiers of all employees listed by selecting Offer Coverage to all EE's at the bottom. Inform the employees that they are now eligible for coverage. 

Employee Enrollment

Eligible employees can log in to Toast Payroll to enroll in benefits. If their enrollment is during your company’s regular Open Enrollment, the employee can follow the enrollment process of the rest of the company. For those enrolling mid plan year, a Qualifying Event is needed. Learn more about offering benefits to employees .

Upon completion of enrollment, employees elections are captured and deductions are automatically created. The enrollment is recorded in the employee’s Document Library with signature of the user who completed the enrollment. It is advised that employee completes their enrollment through their own log in so you have a record of the employee’s acknowledgement of their offer of coverage.

This offer and enrollment, or opt out, in coverage is recorded in the ACA module and the 1095-C code is calculated at the end of the month.

If you are interested in setting up the module, chat with us via the blue chat dot in the lower-right corner of any Toast Payroll page and we can assist you in gathering the required information.

What is needed to set up the module for ongoing reporting?

Hours Data and Measurement Periods are needed for ongoing reporting. This reporting will show who is an FTE, which is an employee that worked an average of 30 hours a week/130 hours a year.  

• • Hours Data: Toast Payroll needs to have one full year of hours data in the system for ongoing reporting. If you need to determine if you are an ALE, the entire prior year’s hours data is needed. If you have been running payroll in Toast Payroll for a year then this data is in the system from payroll. If you are new to Toast Payroll we need to import worked hours per month per employee per FEIN.
  • Measurement Rules: There are two methods for determining if an employee is an FTE:  
  • Month-to-Month Method:  This method is most often used for those employees working a standardized work week as it measures employees each month to determine how many hours they worked. Coverage is offered to these employees at the end of the month. The can be used to measure hours by month. 
  • Look Back Method: This method measures hours “looking back” over a larger amount of time determined by your company based on your interpretation of the law. While more complicated, this method is designed to more accurately determine full time status since it’s measured over a larger period of time. This is the method our ACA reporting uses for calculating FTE employees. The look back method is broken down into three periods:
    • Measurement Period: Period of time during which an employer is measuring a variable hour employee's hours to determine whether or not an offer of coverage must be made in accordance with the employer mandate (system default: 12 months)
    • Administrative Period: Period of time after a measurement period but before a stability period when an employer can take the time necessary to perform accurate calculations for purposes of determining full time status (system default: 1 month)
    • Stability Period: Period of time during which a variable hour employee is offered coverage and provided continuous coverage OR during which an employee is "locked out" of coverage following the results of a measurement period. The employee is still being measured during this period but the determination of the measurement period will not go into effect until after the Stability period has been completed. (system default: 12 month)

Each employee has two sets of these periods:

1. 1. 1. Initial for new hires
      2. Ongoing for employees that have gone through each period initially

Based on your interpretation/application of the ACA, the length of each period may differ for initial vs ongoing measurements. For example, an initial measurement period may be 12 months but ongoing measurement period may be only 11 months. It is also possible that you have different measurement rules for different sets of employees. Your HR team or benefits broker can assist you in determining your Look Back periods.

When you have these inputs in the system, you can use Toast Payroll’s ACA reporting to determine if you are an ALE and which employees qualify for benefits. See  for instructions on how to run these reports. 

What is an Applicable Large Employer (ALE)?

An employer's status as an Applicable Large Employer (ALE) is determined by the size and structure of the employer's workforce.

To be an ALE for a particular calendar year, an employer must have had an average of at least 50 full-time employees (including full-time equivalent employees) during the preceding calendar year.

Visit to learn more about Applicable Large Employers.

I am an ALE. How does Toast Payroll help me manage the ACA?

For those signed up for the Essential tier of service, Toast Payroll allows you to:

• • • Track hours worked through Toast Payroll
    • Report "average" hours worked through the Toast ACA feature
    • Utilize system reports to assist you while you determine which full-time employees may be eligible for benefits under the ACA
    • Track and receive offers of medical coverage to employees

Medical coverage data and details surrounding health benefit plans are important details to consider when determining which codes should appear on the ACA forms. 

Similar to W-2s, the Toast Payroll team can provide you with electronic copies of ACA forms and submit the forms to the IRS on your behalf. Paper copies of Form 1095-C may also be available for those employees who do not consent to receive their forms electronically.

What is Form 1094-C?

, Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS.

What is Form 1095-C?

, Form 1095-C is filed and furnished to any employee of an Applicable Large Employers (ALE) member who is a full-time employee for one or more months of the calendar. The form is an annual statement describing the offer of insurance made available to the employee and the circumstances surrounding whether the employee elected to accept the offer of coverage. ALE members must report this information for all twelve months of the calendar year for each employee.

When are 1095-C forms sent?

employers must furnish a copy of Form 1095-C to applicable employees by March 2, 2026. See for a timeline of important dates.

Who receives a Form 1095-C?

An ALE must furnish a completed Form 1095-C to each employee who was a full-time employee of the ALE for any month of the calendar year.

How do individuals receive Form 1095-Cs?

As long as you use our ACA module, Form 1095-C works just like other year-end documents from a Toast Payroll standpoint. All employees will receive an electronic copy in Taxes & Documents > Year End Documents. Learn more about Forms 1095-C and 1094-C here: 

If employees have chosen paper year-end documents, paper copies are mailed to one address, per FEIN, to be distributed by the employer. 

You can review Form 1095-C filing data and Form 1094-C in Benefits > View and manage health benefits > ACA Reporting.

Am I required to send my employees Form 1095-Cs?

In 2025, the Paperwork Burden Reduction Act (PBRA) modified the ACA. Visit to see if your eligible and how you might be able to avoid distributing these forms.

What happens if I fail to file the 1095-C/1094-C forms? 

The IRS can impose penalties on employers for failing to file an information return by the required filing date and for failing to include required or correct information on their returns. For more information on these fines and how they are assessed, please see the .

Will employees be able to view an electronic copy of Form 1095-C in Toast Payroll?

Yes. Electronic forms will be available on an employee's profile under Taxes & Documents > Year End Forms if the employee opts to receive their forms electronically. You can access additional employee data by navigating to an employee's profile > Benefits > ACA Filing Data. 

What information is shown on a Form 1095-C?

Form 1095-C generally contains some (or all) of the following information:

• • • Employee name
    • Identifying information such as SSN and address
    • Company's name
      • An employee may receive a Form 1095-C for each company they worked for during a year, depending on the circumstances surrounding their eligibility for benefits
    • Information indicating which (or all) months during the year an employee may have been eligible for healthcare coverage
    • Circumstances surrounding an offer of healthcare coverage to an employee;
    • The lowest employee-only monthly premium cost available to the employee
      • The lowest employee-only monthly premium cost available to an employee may not necessarily be the same cost as the plan the employee actually enrolled in. For example, if an employee chose to participate in a family plan healthcare coverage, the cost of an employee-only plan may be listed.
    • Covered dependents

Your HR provider should be able to tell you more about your company's insurance. For more information, refer to the official instructions on the .

What if an employee notices an error on Form 1095-C?

If an employee notices an error or discrepancy on their Form 1095-C, Toast Payroll is available to discuss the details of the data reported and generated on the form by reaching out to .

Where can I view an employee's ACA filing information?

This is found by navigating to an employee's profile > Benefits > ACA Filing Data. On this page, you can preview an employee's 1095-C data. Box 14, 15, and 16 values will be listed for each month.

What is a 1095-B form?

, Form 1095-B is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore, are not liable for the individual shared responsibility payment. Toast Payroll does not support or generate Form 1095-B at this time.

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.