Before 2019, those without health coverage were required to pay a penalty when filing their taxes. Although this individual mandate has since been eliminated, you may still receive IRS Form 1095-B or 1095-C with important tax filing information that can help ensure proper tax return submission.
Dependent upon your coverage, Form 1095-A may also help “reconcile” advance payments of Premium Tax Credit. Read below for more details:
What is Form 1095-B?
Form 1095-B is an IRS information return healthcare providers or small businesses are required to file in order to report details about the health coverage they offer as per the Affordable Care Act (ACA, commonly referred to as Obamacare). Individuals receiving healthcare coverage reported on it receive this form; it includes information such as their name, employer (if an employer-sponsored plan), issuer/carrier such as Kaiser Permanente etc as well as months covered and people covered, where applicable.
Part 2 of the form determines whether the health insurance provided was of minimum essential coverage. If so, check boxes must be marked for each month that coverage was offered and used to calculate an individual shared responsibility payment (if applicable). If gaps in coverage existed between coverage periods, uninsured days are used to calculate penalties; penalties will be assessed per household member who did not have healthcare for at least one month of the year.
Note that members may receive multiple 1095-B forms within a calendar year if their healthcare coverage came from multiple employers at various times or they switched health plans (for instance when switching from HIP to GHI). Furthermore, Massachusetts tax documents called Form MA 1095-HC with similar information as federal Form 1095-B may also be sent by your healthcare provider.
Information provided on a 1095-B form can be used to file an Affordable Care Act-compliant tax return. The form should be kept with other pertinent tax documents such as bank statements and W-2s but should not be included with your actual return submission.
What is Form 1095-C?
Form 1095-C is a report used by employers to document the health insurance they offered their employees during a particular calendar year. Employers considered applicable large employers (ALE), which includes any business employing more than 50 full-time workers during that calendar year, must submit this form annually.
This form is intended to provide the IRS with information regarding any health insurance coverage offered by an employee’s employer and whether or not they enrolled. Furthermore, this form contains details regarding the most cost-effective plan available during that month, serving as proof that employees, their spouses and dependents had eligible coverage during the previous tax year.
Form 1095-B is used to verify your minimum essential coverage when filing taxes; this form does not need to be included with your individual tax return; however, you should keep a copy for your records. If any inquiries arise concerning its contents or information contained within, contact your employer or a professional tax preparer immediately.
Employers that were applicable large entities (ALEs) during the past year and you worked at least 30 hours per week or were enrolled in healthcare coverage will issue you with Form 1095-C each January; the IRS uses this information on this form to assess if you meet financial eligibility for premium tax credit benefits that can help cover premium costs associated with marketplace or employer-sponsored coverage plans.
Your employer must submit Form 1094-C to the IRS each year by February 22; to learn more, visit their website or if your Form 1095-C doesn’t arrive from them directly, request it through IRS Online Request Service (OFS).
What is Form 1095-A?
If you purchased health insurance through the marketplace, form 1095-A will serve as your Health Insurance Marketplace Statement and provides invaluable data that will assist with filing your taxes. This form reveals which months and plans your family members had health coverage as well as APTC credits received during that year. You can then use this data to complete IRS Form 8962 which must accompany your federal income tax return filing.
Form 1095-A can either be sent via mail or uploaded directly into your online marketplace account. If your state-based marketplace doesn’t follow federal government standards for filing its information returns, find out what steps need to be taken in order to access this data.
This form is used to report on the health coverage of individuals and families who enrolled in marketplaces during the previous year. As per the Affordable Care Act, consumers must possess this information to confirm they had minimum essential coverage as required by law and determine whether they received either the Advanced Premium Tax Credit or Premium Tax Credit (APTC/PTC). Its data also assists IRS Form 8962 if applicable if consumers received either of these credits; form 1095-A is then attached as attachment with federal income tax returns of recipients of either of them APTC/PTC).
This form provides details about who was covered under a policy, their plan enrollment details and monthly costs as well as an overview of total annual cost of coverage over time. Furthermore, it also shows any discounts given by marketplace providers for policyholders.
Part III, Column B displays the discount amount. This value is known as Second Lowest Cost Silver Plan (SLCSP), and used to calculate someone’s net premium tax credit. If an SLCSP plan is unavailable in an area of residence, then the next lowest cost silver plan will be listed instead in this field.
What is Form 1095-X?
There are multiple 1095 forms sent out each year; each form serves a specific function and purpose. For instance, Form 1095-C is sent by employers that offer health insurance to their employees containing information about the type of coverage offered as well as when it was active.
Employers that offer health insurance to full-time employees must submit this form as part of complying with the Affordable Care Act (ACA). Self-insured companies also need to file Form 1094-C which lists all 1095-Cs that were filed during that calendar year.
Form 1095-A is one of the most essential documents individuals may receive from the Affordable Care Act marketplace and serves to validate an individual’s claim for premium tax credits – which provide refundable funds that help cover health insurance premium costs.
This form provides information about an individual on lines 1-6, such as their name, social security number and address. Additionally, it includes employer details like their contact phone number and federal Employer Identification Number (FEIN). On lines 7-9 it details when and why coverage was obtained before reporting whether or not it met minimum essential coverage standards each month of the year on line 10.
On line 14, this form is sent directly to the IRS, who uses this information to validate an individual’s claim for premium tax credits. While not required when filing taxes, keeping this form may come in handy should penalties arise for not having health coverage in the future, or when applying for jobs or switching employers.
