Orlando Harmon
The Internal Revenue Service (IRS) requires individuals to report their health insurance coverage when filing their income tax returns. While individuals are not required to submit proof of insurance directly to the IRS, various forms are used to verify coverage. Form 1095-A, provided by the Health Insurance Marketplace, details an individual's coverage, including start and end dates, premiums paid, and any advance payments of the premium tax credit. Form 1095-B, sent by health insurance providers, confirms who was covered and when. Form 1095-C is issued by employers with 50 or more full-time employees, indicating whether they offered health insurance to their full-time employees. These forms help determine eligibility for tax credits and ensure compliance with the individual shared responsibility provision. While the IRS does not directly receive health insurance information from individuals, they obtain it from employers and other entities, allowing them to cross-reference reported coverage with tax filings.
| Characteristics | Values |
|---|---|
| What is Form 1095-A? | Health Insurance Marketplace Statement |
| Who sends Form 1095-A? | The Health Insurance Marketplace |
| Who receives Form 1095-A? | Individuals who enrolled in coverage through the Marketplace |
| What does Form 1095-A include? | Information about the coverage, who was covered, and when |
| When do you receive Form 1095-A? | By early February or before filing taxes |
| What if there are discrepancies in Form 1095-A? | Contact the Marketplace Call Center |
| What is Form 1095-B? | Health Coverage form |
| Who sends Form 1095-B? | Health insurance providers |
| Who receives Form 1095-B? | Individuals they cover |
| What does Form 1095-B include? | Information about who was covered and when |
| When do you receive Form 1095-B? | By early February |
| What is Form 1095-C? | Form to determine eligibility for the premium tax credit |
| Who sends Form 1095-C? | Applicable large employers (50+ full-time employees) |
| Who receives Form 1095-C? | Full-time employees or those enrolled in self-insured plans |
| What does Form 1095-C include? | Information about health coverage during the prior year |
| When do you receive Form 1095-C? | By early February |
| Does the IRS always check your insurance? | No, health insurance information is not provided to the IRS by individuals. |
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What You'll Learn
Form 1095-A: Health Insurance Marketplace Statement
Form 1095-A, also known as the Health Insurance Marketplace Statement, is a crucial document that individuals enrolled in health insurance coverage through the Health Insurance Marketplace receive. This form provides comprehensive information about the coverage, including the start and end dates, the number of individuals covered, and the associated costs. It is essential to ensure that the details on Form 1095-A align with your records, as discrepancies may require corrective actions.
Form 1095-A serves as a vital tool for individuals and families to reconcile their advance payments of the premium tax credit (APTC) with the actual premium tax credit they are eligible to claim. This reconciliation process is facilitated through Form 8962, the Premium Tax Credit (PTC) form. By comparing the advance payments made with the final computed amount, individuals can either repay any excess through taxes or claim a credit for any shortfall. This reconciliation step is mandatory, even if advance payments were not received, to maintain eligibility for future advance credit payments and cost-sharing reductions.
The Health Insurance Marketplace typically sends Form 1095-A to enrollees by mail or makes it available through their online Marketplace accounts. It is recommended to wait for the receipt of Form 1095-A before filing your income tax return, as the information on the form is necessary for accurately completing your tax return. Form 1095-A includes details such as the effective date of coverage, the amount of the premium, and any advance payments made on your behalf.
It is important to carefully review Form 1095-A upon receipt. If you identify any inaccuracies or incomplete information, you may need to contact the Marketplace Call Center and take the necessary steps to correct or amend the form. This process may involve filing an amended tax return using the corrected information. Additionally, if you or anyone in your household had a Marketplace plan, it is crucial to retain Form 1095-A with your important tax documents, similar to how you would keep Form W-2 or other tax records.
Form 1095-A plays a central role in ensuring compliance with individual shared responsibility provisions and allows individuals to provide proof of health insurance coverage for themselves and their families. By reconciling advance payments and claiming applicable credits, individuals can manage their tax obligations effectively and avoid potential delays in receiving refunds. Therefore, it is essential to understand the information provided on Form 1095-A and take the necessary actions to maintain accurate records for tax purposes.
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Form 1095-B: Health Coverage
Form 1095-B has four parts: Part I identifies the person whose name is on the insurance policy. For an employer-sponsored plan, this would be the name of the employee. Part II identifies the employer, if the coverage is employer-sponsored. Part III identifies the insurance company providing the coverage. Part IV lists the people in your household who are covered by the insurance. For each name, there is a box that will be checked if the person was covered by insurance for all 12 months of the year.
For years before 2019, Form 1095-B was used to determine whether you and your family members had health coverage that satisfied the individual shared responsibility provision. However, for tax years after 2019, those who didn't have minimum essential coverage (or a waiver) no longer had to pay a penalty when filing their tax returns.
Some people covered by employer-sponsored insurance might receive Form 1095-C instead of or in addition to Form 1095-B. Form 1095-C is generated by large employers with 50 or more full-time employees and provides similar information to Form 1095-B.
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Form 1095-C: Large employer health coverage
Form 1095-C is a form that relates to health coverage provided by an employer. Applicable Large Employers (ALEs) must send Form 1095-C to any full-time employees for one or more months of the calendar year. An ALE is defined as an employer with 50 or more full-time employees.
Form 1095-C provides information about the health coverage offered by the employer. This includes details about the coverage, such as the effective date and the number of people covered. It is used to help determine an individual's eligibility for the premium tax credit. This form is also used to determine if an individual, their spouse, or their dependents had health coverage for the entire year and, if not, for which months they did.
You may receive Form 1095-C from more than one employer if you worked for multiple employers that offered coverage during the year. It is also possible to receive Form 1095-C from an employer even if you did not participate in their health plan.
It is important to note that Form 1095-C is not the only health coverage form that individuals may receive. Form 1095-A is provided to those who enrolled in coverage through the Health Insurance Marketplace, while Form 1095-B is sent by health insurance providers to individuals they cover. These forms provide information about an individual's health coverage during the previous year and may be necessary for filing income tax returns.
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Premium Tax Credit (PTC)
The Premium Tax Credit (PTC) is a mechanism established by the Affordable Care Act (ACA) to make insurance more affordable for qualifying individuals and families. The PTC is a refundable tax credit that can be applied directly to the cost of insurance premiums. It is available to certain lower- and middle-income individuals and families who do not receive insurance through their employer and whose household income is too high to qualify for Medicaid. To be eligible for the PTC, a household's income must be between 100% and 400% of the federal poverty level (FPL). This eligibility criterion is determined by Section 1401 of the ACA.
The PTC is only available to those who purchase insurance through the ACA-established health exchanges. Once enrolled in a healthcare plan, individuals and families will automatically be informed of their eligibility for the PTC. They can then decide how to use the credit—either as an advance credit payment to lower their monthly premium or as a refund at tax time.
The IRS has introduced several new forms connected with the PTC: Form 8962, the Premium Tax Credit (PTC), must be filed with a 1040 income tax return by individuals who have already received advance subsidies through a healthcare exchange. Form 1095-A, the Health Insurance Marketplace Statement, is sent to individuals who enrolled in coverage through the Marketplace, providing information about the coverage, who was covered, and when. Form 1095-B is sent by health insurance providers to individuals they cover, with details of who was covered and when. Form 1095-C is sent by applicable large employers (those with 50 or more full-time employees) to their full-time employees, providing information about the health coverage offered.
The calculation of the PTC is a complex process that takes a number of factors into account. The actual PTC is the lesser of the maximum PTC or the actual premium paid by the individual or family for the qualified health plan. This is then claimed on the individual or family's federal income tax return and may reduce the amount of tax owed or increase the tax refund.
The expiration of pandemic-era enhanced PTCs puts millions of people at risk of losing health insurance. It is estimated that allowing enhanced PTCs to expire would increase uninsurance by 16% and reduce subsidized Marketplace coverage by 42%.
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Health Insurance Marketplace
The Health Insurance Marketplace, also known as the ACA or Affordable Care Act, provides individuals and families with access to affordable health insurance options. There is no income limit to be eligible for the Marketplace, but enrollees must be U.S. citizens or nationals or be lawfully present.
The Health Insurance Marketplace offers a range of plans that cover medical, dental, and vision care. It also provides special patient protection for those insured through the Marketplace. The Marketplace has an open enrollment period each year, as well as special enrollment periods for eligible taxpayers. For instance, if you experience changes in your household income or family size, you may qualify for a special enrollment period that allows you to purchase health care insurance outside of the open enrollment window.
If you purchased health care insurance through the Marketplace, you will receive a Form 1095-A, Health Insurance Marketplace Statement, at the beginning of the tax filing season. This form provides information about your health care coverage, including the start and end dates of your coverage, the number of people covered, and the total monthly premiums paid to your chosen insurance company. Form 1095-A helps you complete your federal individual income tax return.
If you received advance payments of the premium tax credit, you must complete Form 8962, Premium Tax Credit, and attach it to your tax return. This form allows you to reconcile your advance payments with the premium tax credit you are allowed to claim. Filing your tax return without reconciling these payments may delay your refund and impact future advance credit payments.
It is important to note that you may receive multiple Form 1095-As if there were changes in your coverage or family status during the year. Additionally, you may receive a corrected or voided Form 1095-A if the initial form contained incorrect or incomplete information. Therefore, it is essential to carefully review the information on Form 1095-A and seek guidance from the Marketplace or HealthCare.gov/taxes if you have any questions.
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Frequently asked questions
If you or anyone in your household had a Marketplace plan, you should receive Form 1095-A, the Health Insurance Marketplace Statement, by mail or in your Marketplace account.
If you receive a Form 1095-A with incorrect information, you can refer to the IRS's Corrected, Incorrect or Voided Forms 1095-A questions and answers to find out how it affects your taxes. If you have not received a Form 1095-A and believe you should have, contact the Marketplace Call Center.
No, you should not attach Form 1095-A to your tax return. However, you should wait to file your income tax return until you receive that form.
You are likely to receive more than one Form 1095 if you changed coverage or employers during the year, or if different members of your family received coverage from different providers.
