What 1095 Tax Form Do You Need?
Article Updated 1/28/2016
Under the new healthcare law, known as the ACA or Obamacare, employees, employers, and health insurance issuers (companies) are required to provide certain forms
1095-A, 1095-B and 1095-C, which provide the IRS with information about an individual’s health insurance coverage. This is required as proof of complying with the healthcare law and to determine if you are eligible for an additional tax credit when you file your income taxes with the IRS. Or in some cases, if you made more money than you anticipated for the year, you might be required to repay money for your healthcare coverage (a reduction in the amount of subsidy you received). The form you receive will also determine if you must pay a fine if you did not purchase health insurance coverage that the Affordable Care Act (ACA) requires.
Typically one of these forms will arrive by mail with your usual tax documents; a 1095 A, 1095 B, or the 1095 C which must be filed with your IRS income tax return, unless you are exempt from the healthcare law. It will depend on if you had a healthcare policy that is subsidized and purchased through the Marketplace, had employer provided/or partial employer coverage, have purchased your own policy from the Marketplace or an independent insurance company, did not purchase healthcare coverage, or received your healthcare coverage through Medicare, Medicaid, or CHIP which will determine which healthcare form 1095-A, B, or C you will receive to reconcile your healthcare coverage responsibilities, if any, when filing your income taxes.
Which 1095 Tax Form Applies To You?
First before we begin the process of explaining who requires each individual form, let’s quickly take a moment to provide you with some quick links to the IRS website where all three forms can be downloaded from. Most individuals will receive one of these forms, either the 1095A, 1095B, or the 1095C by mail as described above. Despite this, we do want to provide you with access to the documents directly from the IRS website should you want to examine them ahead of receiving them in the mail.
Please note that we are going to start this guide to understanding the 1095 forms by focusing on the more commonly requested tax form, the 1095C.
What Is The 1095-C Tax Form And Who Is Required To File One?
Link To IRS 1095-C PDF
For many people this new part of the implementation of the healthcare law has people scratching their head about what all these new forms mean?
Don’t be confused or intimidated, it’s much easier to understand than the government or IRS web sites will lead you to believe, while they elaborate on and on about it in their IRS legalese, it is actually fairly simple.
Below you will find a common sense explanation of the 1095-C Form, who should receive one, and what you need to do or not do with it when filing your federal income tax return.
Who Should Expect To Receive A 1095-C Form?
The Affordable Care Act (ACA) or what you might know better as Obamacare is in its first year of requiring employers to send 1095-C statement forms to particular employees that fall into a (this) specific category of the healthcare law of the Affordable Care Act. Does this mean you?
This form (1095 C) is to be sent to employees working for an employer with fifty or more full time employees. The IRS has termed these employers as Applicable Large Employers (ALEs). The Affordable Care Act requires that all ALEs (your employer) send a Form 1095-C to full time employees. This form applies to all full time employees (employees who work thirty or more hours per week) or any employees who were enrolled in a health insurance plan offered by the employer (company) during the tax year, in this instance 2015 employees.
Therefore, if you are/were a full time employee you should expect to receive a 1095-C Form from your employer. If you do not receive one you should contact the Human Resources Department (HRS) of the company you work for. In the event it is a former employer, contact HRS or the insurance carrier for your former employer to obtain your 1095-C Form.
Important Information Your 1095-C Form Contains
Your 1095-C Form will provide important information about your healthcare coverage for the (applicable) tax year. It contains the vital information needed by the IRS to know about the healthcare coverage offered to you and/or your family members by your employer. This statement form will contain information that you will need to determine your eligibility for a premium tax credit, if you will qualify for one based on your income and necessary data when filing your federal income tax return.
If you were a full time employee of a company that employs fifty or more employees you should expect to receive a Form 1095-C from your employer for the 2015 tax year before March, 31, 2016. However, you may not receive a 1095-C if you were not enrolled in healthcare coverage through your employer due to the fact that you were insured under your spouse’s insurance plan. In this instance, you will not receive a statement/form if you were listed as the spouse or dependent of a family member’s health insurance plan.
It is important to keep your 1095-C Form for your records, just as you would with any other relevant tax records or documents that you may have to provide at a later date ( if you re audited). The IRS will not require to you to attach your 1095-C Form to your federal income tax return, nor are you responsible to send it to the IRS, it is information you will need to complete your federal income tax return. And as with any tax information should be retained
When Will Your Form 1095-C To Arrive?
If you are an employee of a business who employs fifty full time employees or more you should receive a Form 1095-C for the tax year 2015 before March 31, 2016. Be certain to retain this document (the 1095-C tax form) as you would with any important tax documents or records. Even though this form only pertains to your health insurance coverage and is not required to be attached to your federal income tax return, it DOES contain important information you will NEED to complete your federal income tax return.
Are You Required To Send A Copy Of Your 1095-C With Your Income Tax Return
The simple answer is NO, you do not need to include a copy of your Form 1095-C with your federal income tax return, but as with any tax associated record you should keep this record (document) of information with your tax records.
It should be noted that Part 3 of your 1095-C Form will be blank if any of the following applies to you:
- You are a member of a union
- Your coverage is provided through COBRA
- You, nor your dependents were enrolled for insurance for any calendar month of the tax year
- Your health insurance coverage is provided through a fully insured plan
If any of the information on your 1095-C Form is incorrect you should contact your employer to get a revised (corrected) version of the form for your records.
Tax Form 1095-B Employer Sponsored Health Insurance Coverage
Typically the 1095-B forms are filed to the IRS by insurers (your health insurance carrier) and/or your employer indicating what type of coverage you and/or your family had during that tax year. It is required by law that a 1095 B statement is provided to the insured (you) from your insurance company, employer, or sometimes both, for your tax filing records in order to provide the necessary information you will need for your federal income tax filing.
Link To IRS 1095-B PDF
The intention of the 1095-B form is to let the IRS know of the individual(s) who have chosen a healthcare insurance plan (purchased coverage) outside of the Marketplace also known as healthcare.gov, or for persons who may have more than one source (insurance company) of healthcare insurance coverage.
It is this form that details for the IRS from which insurance provider(s) you purchased your coverage from, or that you received your healthcare plan through your small business employer (employers with 50 or less full time employees), how long you have had your health insurance plan for that tax year and whether the employer healthcare plan you have meets the minimum ACA standards for healthcare coverage required by the ACA.
In the event that your employer provided coverage does not meet the minimum requirements of the ACA, it gives the IRS the additional required information for your supplemental health insurance policy (secondary policy) you purchased to meet the ACA minimum standard of coverage required.
If your employer provided coverage that does not meet the ACA minimum essential coverage requirements, and you did not purchase supplemental healthcare insurance it will be necessary for you to claim a coverage exemption (if you are eligible for exemption) or you will have to pay a shared responsibility payment (tax fine) when you file your federal income tax return.
Why Is 1095-B Form Is Important?
Just as the other tax reporting information is gathered and reported to the IRS regarding your income, withholding, and social security taxes deducted from your paycheck by your employer and provided to you, the 1095-B form is provided to the insured (you) and the IRS by both your employer and/or insurance provider as proof of your complying with the healthcare law (ACA). The 1095-B form will apply to the following individuals who obtain their healthcare insurance from one of the sources listed below:
- Small Business Health Options Program (SHOP) which are employers of 50 or less full time employees
- Employer sponsored healthcare coverage such as; coverage for retired employees and “COBRA” for former employees
- Government sponsored healthcare programs such as; Medicare Part A, Medicare Advantage, Medicaid, CHIP, Tricare for members of the military, VA benefits and plans for Peace Corp volunteers
- Individual Marketplace insurance purchased from the web based federal and/or state insurance site set up under the Affordable Care Act
- Multiemployer plans
- Other accepted minimum essential coverage plans you may have had in place before the Affordable Care Act became law
Does My Health Insurance Meet The Minimum Requirements Of The ACA?
If you are uncertain about whether your health insurance coverage meets the minimum coverage standards required by the Affordable Care Act simply contact your insurance company to inquire.
It is important to know that providers (employers or insurers) of minimum essential coverage (what the ACA requires you to have) are only required to provide you with one Form 1095-B for all individuals (you and your family members) whose healthcare coverage is reported on this form. It is up to you to provide copies to the other family members included in your healthcare insurance policy if it is needed for their own federal income tax returns.
What If I Haven’t Received A 1095-B Form?
Your insurance company (provider) is required by law to send out 1095-B forms to you and the IRS beginning with the 2015 tax year. If you have not received your copy of the 1095-B Form you should contact your health insurance provider immediately. It is possible that people with employer-sponsored insurance may receive the 1095-C Form instead of the 1095-B Form. The 1095-C Form is essentially the same as the 1095-B and provides the same required information to the IRS regarding your healthcare coverage, the only distinction is that it is sent by employers who have 50 or MORE full time employees.
Please Note: It may not be unusual if you receive both the 1095-B Form and the 1095-C Form, simply use the form that applies to how many full time employees work for your employer; 1095-B for 50 or fewer full time employees, or 1095-C for 50 or more full time employees. Your employer should be able to clarify with you if they have 50 or more full time employees before you go to file your taxes. It's important that you ask instead of guessing. Depending on how your employers company is structured
If You Had A Gap In Coverage
The 1095-B Form is your proof that you obtained the “minimum essential coverage” that is required by the Affordable Care Act (Obamacare) for that tax year and therefore you are not subject to any tax penalty on your federal income taxes. However, if you or your family members covered on your healthcare plan had a lapse (gap) in your/their coverage of more than three months you will have to pay a penalty tax that is based on the number of months you or your family member was uninsured. You can determine what your penalty tax amount will be from the check boxes in Part IV of the form.
It’s important to mention that people who are uninsured may still be able to avoid paying the tax penalty if you qualify for an exemption. Reasons for qualifying for an exemption include the following from the healthcare.gov website:
Three Important Facts About Health Coverage Exemptions:
- Exemptions are available based on a number of circumstances, including certain hardships, some life events, health coverage or financial status, and membership in some groups.
- You claim some health coverage exemptions on your federal tax return. Others you apply for with a paper application.
You don’t have to pay the fee for any month you’re covered by a plan that qualifies as minimum essential coverage. If you’re uncovered only 1 or 2 months, you don’t have to pay the fee for any month.
1095-A Health Insurance Marketplace Statement
As a part of the Affordable Healthcare Act (ACA), also known as Obamacare, the Department of the Treasury and the Internal Revenue Service now requires new tax form(s) to accompany your federal income tax return. The forms are to assist you in determining what your shared responsibility, if any, is for your healthcare insurance coverage. It will enable people who purchased insurance from the health care marketplace to calculate whether or not you are entitled to an additional health insurance tax credit on your federal income tax return (more money back or additional reduction in taxes owed) or if you may owe an additional tax to pay for the healthcare coverage subsidies you have already received.
Who Receives The 1095-A Form In The Mail?
If you went to the Marketplace for your health insurance coverage and qualified for premium tax credits (subsidies) to help pay for your health insurance policy’s monthly payment you will need to file an 8962, Premium Tax Credit form with your federal income tax return. You will use this form to show if you used more of the tax credit your income qualifies you for in health insurance subsidies (tax credits) or if you will have to pay an additional tax to cover your portion of the health insurance coverage you received.
The 1095-A form will include the detailed information about the Marketplace insurance you obtained for yourself and or family members in 2015. You will need to include this form with your 8962, Premium Tax Credit when you file your federal income tax return. The 1095-A will be sent to you from the Marketplace, so be sure to carefully monitor your mail from the Marketplace. You should receive the 1095-A Statement from the Marketplace in the beginning of February, but you can also go to your online Marketplace account and print it out. This information (form) is necessary to complete your federal income tax return and receive your health insurance tax credit(s) or determine what you may owe in taxes, if any.
The 1095-A Statement will tell you what you have paid for your insurance coverage for 2015 and how much premium tax credits (subsidies) you used to pay for your coverage. The statement will contain a figure the IRS calculates called the “second lowest cost Silver plan” (SLCSP) which is how the IRS determines just how much of a tax credit (subsidy) you are entitled to based on your income.
Sometimes the government is not always accurate in its calculations, so it’s very important to carefully read the information contained on your 1095-A Statement. Be certain the monthly premium amounts are correct and who is covered (family members). If ANY of the information is incorrect on your 1095-A Statement you will need to contact the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) Available 24 hours a day, 7 days a week to request a corrected 1095-A Statement.
How To Know If Your 1095-A Statement Is Incorrect
Your 1095-A Statement will show the “second lowest cost silver plan” premium for every month you and/or any of your family members were enrolled in a Marketplace healthcare plan. If you see a blank space or a zero in any of the column B’s in Part III of your 1095-A Statement (where there should be a premium amount each month) then you will need to contact the Marketplace Call Center to have a corrected version sent to you. When you have received a corrected version of your 1095-A Statement you will then be able to prepare your federal income tax return to get your actual return filed.
If There Were Changes In Your Family Status
If during the course of the year there were any changes to your initial Marketplace enrollment information it is essential to update your information at the Marketplace Call Center to obtain an updated 1095-A Statement form. Changes such as:
- Change of marital status (getting married or divorced)
- Death of a dependent
- Birth of a child/children
What To Do If You Didn’t Receive Your 1095-A Statement
If you haven’t received your 1095-A Statement by the first part of February do not try and file your federal income tax without it, you may lose your subsidy tax credit or be subject to IRS penalties for filing an incorrect tax return. Contact the Marketplace Call Center to request your 1095-A Statement and then file your federal income tax return. Overall your best course of action is to begin preparing and collecting any necessary documentation as early as possible.