Alyssa Lane
The IRS has various mechanisms to determine whether an individual had health insurance coverage, including Form 1095 and its variants. These forms are provided to the IRS by health insurance companies, the Health Insurance Marketplace, or employers offering health coverage. While there is ambiguity around the IRS's ability to verify insurance coverage for every taxpayer, it is important to provide accurate information on tax returns. Individuals can refer to these forms to determine their health coverage and eligibility for tax credits.
| Characteristics | Values |
|---|---|
| How does the IRS know about your insurance? | The IRS receives information about your health coverage from your insurance provider or employer. |
| Who sends the information to the IRS? | Health insurance providers or employers with self-insured health plans are responsible for reporting that health coverage to the IRS. |
| What form does the information take? | The information is provided to the IRS in the form of Form 1095. |
| What is Form 1095? | Form 1095 is a form that provides information about your health care coverage, including who was covered and when. |
| Are there different types of Form 1095? | Yes, there are three types of Form 1095: Form 1095-A, Form 1095-B, and Form 1095-C. |
| What are the differences between the types of Form 1095? | Form 1095-A is sent by the Health Insurance Marketplace to individuals who enrolled in coverage there. Form 1095-B is sent by health insurance providers to individuals they cover. Form 1095-C is sent by employers with 50 or more full-time employees to their full-time employees. |
| When do individuals receive Form 1095? | By early February, individuals may receive one or more Form 1095 forms providing information about their health care coverage for the previous year. |
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What You'll Learn
Form 1095-A: Health Insurance Marketplace Statement
The IRS does not automatically know if you had health insurance or not. However, health insurance providers are required to send this information to the IRS. Form 1095-A, also known as the Health Insurance Marketplace Statement, is sent by the Health Insurance Marketplace to individuals who enrolled in coverage there. This form contains information about the coverage, who was covered, and when.
The Health Insurance Marketplace is required to send Form 1095-A to individuals who enrolled in a qualified health plan through the Marketplace. This form provides information about the individual's health care coverage, including the effective date, amount of the premium, and Advance Payments of the Premium Tax Credit (APTC) paid on behalf of the individual and their tax family for the year of coverage. It is important to note that Form 1095-A should only include information for the months the individual had a Marketplace plan.
If you had a Marketplace plan in 2024, you should receive Form 1095-A by mail no later than mid-February. It may also be available in your Marketplace account from mid-January to February 1. It is recommended that you do not file your taxes until you have received this form. If there are any discrepancies between the information on your Form 1095-A and your records, you should contact the Marketplace Call Center.
Form 1095-A is used to complete Form 8962, Premium Tax Credit (PTC). This allows individuals to reconcile their APTC with the premium tax credit they are allowed and to compute their excess APTC or net premium tax credit. It is important to note that Form 1095-A should not be attached to your tax return.
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Form 1095-B: Health Coverage
Form 1095-B, Health Coverage, is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and are therefore not liable for the individual shared responsibility payment. This form is sent out by health insurance providers to individuals they cover, with information about who was covered and when.
For years before 2019, you could use Form 1095-B for information on whether you and your family members had health coverage that satisfied the individual shared responsibility provision. Certain employers send this form to certain employees, with information about what coverage the employer offered. Employers that offer health coverage referred to as "self-insured coverage" send this form to individuals they cover, with information about who was covered and when.
You may receive more than one Form 1095-B if you had coverage from more than one provider or if you worked for more than one employer that offered coverage. You are also likely to get more than one form if you changed coverage or employers during the year or if different members of your family received coverage from different providers. For example, if you are single with no dependents and you change jobs during the year, you will receive a Form 1095-B from each employer, providing information about the coverage in which you were enrolled.
You don't need Form 1095-B to file your federal taxes. However, if you have Medicare Part A (Hospital Insurance) coverage, you can ask Medicare to send you an IRS Form 1095-B. You should keep this form with your other important tax information, and send it to the IRS when you file your taxes.
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Form 1095-C: Eligibility for the premium tax credit
Form 1095-C is one of several health care forms that individuals may receive by early February. These forms provide information about the health care coverage that the individual had or was offered during the previous year.
Form 1095-C is sent by applicable large employers to their full-time employees. Applicable large employers are those that had 50 or more full-time employees, including full-time equivalent employees, in the year before the year to which the form relates. Form 1095-C provides information about the health coverage offered by the employer, sometimes referred to as "self-insured coverage".
Form 1095-C can be used to help determine eligibility for the premium tax credit. The premium tax credit is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. To get this credit, certain requirements must be met, and a tax return must be filed with Form 8962, Premium Tax Credit (PTC).
For tax years other than 2020, if advance payments of the premium tax credit were made for an individual or a member of their tax family's health insurance coverage through the Health Insurance Marketplace, Form 8962 must be completed and attached to the tax return. Form 1095-A, Health Insurance Marketplace Statement, provides information about health care coverage, including the effective date, amount of the premium, and advance payments of the premium tax credit (APTC) paid. This information is then used to complete Form 8962 to reconcile the APTC with the premium tax credit allowed and compute any excess APTC or net premium tax credit.
It is important to note that Form 1095-C is not necessary to file a tax return, and other forms of documentation can be used in its place. However, it can provide valuable information about an individual's health coverage during the prior year and assist in determining eligibility for the premium tax credit.
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Form 8962: Premium Tax Credit (PTC)
Form 8962, Premium Tax Credit (PTC), is a form that must be filed with your annual income tax return if you or a member of your family received advance payments of the Premium Tax Credit through the Health Insurance Marketplace. This form is used to calculate whether any advanced premium tax credits paid on your behalf were appropriate based on your income. It involves answering a series of questions about your income and how much you paid for health insurance.
If you elected to buy health insurance through the government's Health Insurance Marketplace and received advance payments of the Premium Tax Credit, you will need to file Form 8962 with your tax return. The form will show whether you are due a tax credit or if you owe money. If you received a tax credit, it will reduce the total tax you owe for the year or increase the amount of your tax refund. On the other hand, if the advanced credits were excessive, you will need to pay the difference to the government when filing your taxes.
You will receive Form 1095-A, Health Insurance Marketplace Statement, which provides information about your health care coverage. It is recommended to wait for this form before filing your income tax return. Form 1095-A includes details such as the effective date, amount of the premium, and APTC paid on your behalf for the year of coverage. You can then use this information to fill out Form 8962 and calculate whether the advanced credits were higher or lower than what you were entitled to, based on your income.
Additionally, if you experienced changes in your marital status or had other family or coverage changes during the year, you will need to complete an additional section on the second page of Form 8962, titled "Allocation of Policy Amounts." It is important to note that failing to include Form 8962 with your federal tax return may impact your eligibility for advanced tax credit payments in the future.
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Health coverage reporting requirements
The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. This is done through Form W-2, which is provided to the IRS by the entity that provides the form to you. The value of the employer's excludable contribution to health coverage is not taxable and is for informational purposes only. This reporting provides employees with useful and comparable consumer information on the cost of their healthcare coverage.
There are different forms for different situations. For example, Form 1095-A is for those who enrolled in coverage through the Health Insurance Marketplace, while Form 1095-B is for those who have coverage through a health insurance company. Form 1095-C is for those whose employer is an applicable large employer, meaning it had 50 or more full-time employees in the year before the year to which the form relates.
You may receive more than one form if you had coverage from more than one provider or if you worked for more than one employer that offered coverage. You are also likely to get more than one form if you changed coverage or employers during the year or if different members of your family received coverage from different providers.
The Affordable Care Act added section 6055 to the Internal Revenue Code, which requires every provider of minimum essential coverage to report coverage information by filing an information return with the IRS and furnishing a statement to individuals. This information is used by the IRS to administer the individual shared responsibility provision in section 5000A. Health coverage providers are required to file information returns with the IRS and furnish statements to individuals each year to report coverage information for the previous calendar year.
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Frequently asked questions
The IRS requires health coverage providers to report information about the coverage they provide. This includes health insurance issuers, plan sponsors of self-insured group health plans, and governmental units that provide coverage. This information is sent to individuals in the form of Form 1095.
Form 1095 is a form that provides information about your health care coverage during the previous year. There are three types: Form 1095-A, Form 1095-B, and Form 1095-C. Form 1095-A is sent by the Health Insurance Marketplace to individuals who enrolled in coverage there, Form 1095-B is sent by health insurance providers to individuals they cover, and Form 1095-C is sent by applicable large employers.
It is recommended that you wait to receive Form 1095 before filing your tax return. However, if you do not receive Form 1095-B or Form 1095-C by the time you are ready to file, you can still prepare and file your tax return without them.
If you did not have insurance for the entire year, you will still receive a Form 1095 that shows the months you were covered. You may also need to complete additional forms, such as Form 8962, to reconcile any advance payments of the premium tax credit.
