What is Form 1095?: Your Health Insurance Tax Forms
For years, you probably only worried about your W-2 form coming tax time. But thanks to the Affordable Care Act (ACA), you might be getting some new forms in the mail, like Form 1095. Understanding what is Form 1095 is easier than it might seem at first glance.
So what is Form 1095? Form 1095 is a group of forms designed to show the IRS proof of your health insurance coverage. Think of it like your W-2 for health insurance.
There are different forms for individuals, employers, and insurance providers. Understanding how these forms are different can help when tax time rolls around.
Three Main Types: 1095-A, 1095-B, and 1095-C
Alright, so we know "what is Form 1095" generally, but let's get specific and break down these forms a bit further, shall we?
Form 1095 is divided into three different versions: 1095-A, 1095-B, and 1095-C. These different versions exist because they deal with various aspects of health coverage and are used for slightly different reporting requirements. Now, let's dig into the key points of each of these versions.
What is Form 1095-A: Health Insurance Marketplace Statement
This one is for you if you got your health insurance through the Marketplace or an Exchange. The University of California System explains that you do *not* need to send copies of Form 1095 to the IRS when filing taxes, but you will need the information from it.
This makes it crucial to save any 1095-A Forms you receive each tax year. They can be super helpful, especially if you're claiming the premium tax credit.
Think of this Form 1095-A as a kind of "receipt" from the marketplace. You can find all the essential details of your coverage: how much your premium was each month, how many people were on your plan, and how much you paid versus the amount of the premium tax credit.
Form 1095-A becomes a big deal when it's time to reconcile any advance premium tax credits you received during the year. Sometimes these credit estimates are a little off, and you might have to pay back some of the money.
Or, sometimes you might end up getting a little more. You'll know exactly where things stand when you use this form to file Form 8962 - which deals with this credit calculation. The IRS offers resources to help if you had your taxes rejected because you were missing this critical form, however, that could have been avoided if the form was filed on time.
What is Form 1095-B: Health Coverage Form
Now, 1095-B is more for verifying that you and any family members you covered had health insurance for the year. Think of it like proof that you met the minimum essential coverage (MEC) requirements of the Affordable Care Act.
Who gives this to you? Usually, smaller companies (those with fewer than 50 employees) that provide self-funded coverage will send you this, but not always. If you don't receive one from a self-funded employer with less than 50 employees, there should be instructions provided by them on how to get one.
Keep in mind: even though you don't *have* to attach this form to your taxes, it's wise to keep it with your other important tax documents.
What is Form 1095-C: Employer-Provided Health Insurance Offer and Coverage Form
Lastly, we've got 1095-C, which comes into play if you're employed by an "Applicable Large Employer" - meaning they have 50 or more full-time equivalent employees. This form's main purpose is to verify that these employers offered healthcare that met those ACA affordability standards.
As the University of North Carolina School of the Arts shares on its site, "It is optional to have Form 1095-C to file your return." This is because 1095-C is more to determine if the employer might be on the hook for any ACA-related penalties. This is super important to employers so they avoid the IRS sending them a letter in the mail because they didn't offer health insurance.
Beyond the Basics: When to File and What Information These Forms Include
Alright, you've got the 1095 forms - great. But you might wonder, 'Now what?' Let's break down what information they contain and why it matters, especially come tax time.
Form 1095-A: Detailed Look at Marketplace Coverage
First things first - remember you can't file your tax return accurately if you haven't received this form. The deadline for the Marketplace to provide this to you is January 31, so hold tight.
Form 1095-A gets pretty specific. Here's what you'll usually find on it:
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Covered Family Members: A clear list of who in your family was covered under your marketplace plan.
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Coverage Dates: Which months during the tax year you had active coverage? Helpful if you started or stopped coverage at any point.
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Monthly Premium: How much does your plan cost each month?
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Benchmark Plan Costs: This can be a little confusing. The form also shows the cost of what's called the "benchmark plan". That's the second-cheapest silver plan on your Marketplace, and it's used to calculate those premium tax credits.
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Advance Payments of Premium Tax Credit: How much, if any, was paid to your insurer directly by the government each month?
It sounds complex, but all those pieces of information work together. With the details on your 1095-A, you're ready to tackle that 8962 form.
Forms 1095-B and 1095-C: Employer Responsibilities and Minimum Essential Coverage Verification
Now, for these other two forms, you don't need to include them with your return, just keep them for your records. These forms typically have a later deadline (February 28, for hard copies; electronic copies are April 1).
For these forms, you'll typically see info about:
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Your Type of Coverage: The form spells out whether your health coverage was employer-sponsored, self-funded, individual coverage from outside the marketplace, and more. This matters if there are questions about how your insurance was reported to the IRS.
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Dependents Covered: The 1095-B or 1095-C should include details on which family members you covered throughout the year.
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Coverage Dates: Again, knowing precisely when you (or those covered under you) had coverage.
Form 1095-C will give you additional details about whether your employer offered health coverage that met those ACA requirements for affordability and minimum value. It also goes into detail about who in your family was offered coverage and for which months of the year. It even tells you how much of your monthly premium was subsidized by the employer.
What If My Forms Aren't Correct or Are Missing Information?
Sometimes, errors occur, whether by honest mistake or because you switched coverage mid-year. No problem, the good folks at the IRS have got you covered.
If you need a corrected 1095-A because you received it from a Marketplace, it's fairly easy. Typically, you just reach out to the Marketplace where you got your coverage or access their online portal.
Sometimes you may even have to reach out to an insurance navigator to request one. You can always try to get a copy online but if you aren't sure how to access your account online, your marketplace's customer service number is always a good fallback option.
Now, if it's a Form 1095-B or C that's not right (meaning there are errors) or you just plain didn't receive one when you were expecting to, you need to contact whoever issued the form, whether it's your employer, insurer, or state/federal program.
In some states, you can request a 1095-B by mail. Typically you should give them time to issue corrected forms, as you usually don't need them until tax filing time the following year.
Final Thoughts
Figuring out what is Form 1095 can seem overwhelming. But honestly, you mostly just need to hang onto the forms (particularly 1095-A) until it's time to file taxes. These forms might not affect everyone come tax season.
The biggest takeaway? Understanding these forms and being proactive can simplify your taxes, making those dreaded tax forms just a little less daunting. For more information, contact us for a consultation today.