Decoding 1095-B and 1095-C: Your Guide to Proof of Health Insurance Coverage
The Affordable Care Act (ACA), also known as Obamacare, introduced significant changes to the American healthcare landscape. Among these changes was the requirement for individuals to have minimum essential health coverage (MEC) or pay a penalty. To track and verify compliance, the IRS implemented reporting requirements for individuals, employers, and insurance providers. Central to this reporting system are the 1095 forms: 1095-A, 1095-B, and 1095-C. While 1095-A pertains to coverage obtained through the Health Insurance Marketplace, this article focuses on the 1095-B and 1095-C forms, which provide proof of health insurance coverage obtained through other means. Understanding these forms is crucial for navigating tax season and ensuring compliance with the ACA.
1095-B: Health Coverage
The 1095-B form is used to report health coverage provided by small employers who are not required to file 1095-C forms, as well as by government agencies and other coverage providers. It serves as proof that you and your covered dependents had minimum essential coverage during the year.
Who Receives Form 1095-B?
You will receive Form 1095-B if you were covered by a health plan that is required to report coverage information and is not required to file Form 1095-C. This includes individuals covered by:
- Small employers (generally those with fewer than 50 full-time equivalent employees) who provide health insurance.
- Government-sponsored health coverage programs like Medicaid, CHIP, and certain other government plans.
- Other insurance providers offering non-employer-sponsored coverage.
Information Included on Form 1095-B:
The 1095-B form includes the following information:
- Covered Individual Information: Your name, address, and Social Security Number (SSN). For dependents, their name, SSN (if applicable), and date of birth.
- Coverage Provider Information: The name, address, and phone number of the entity providing your coverage.
- Coverage Period: The months during which you and your dependents were covered by the plan. This will indicate whether you had coverage for the entire year or only part of it.
- Policy Number: The policy number associated with your health insurance plan.
- Type of Coverage: A code indicating the type of coverage, such as employer-sponsored coverage, government-sponsored coverage, or individual market coverage.
How to Use Form 1095-B:
While the individual mandate requiring minimum essential coverage is no longer in effect at the federal level, some states still have their own individual mandates. If you live in a state with a mandate, you may need to provide information from your 1095-B to demonstrate compliance. Even if your state doesn’t have a mandate, keeping your 1095-B with your tax records is recommended. It can be helpful if questions about your coverage arise in the future. You do not need to submit Form 1095-B with your tax return.
1095-C: Employer-Provided Health Insurance Offer and Coverage
Form 1095-C is used by Applicable Large Employers (ALEs) – generally those with 50 or more full-time equivalent employees – to report information about the health insurance they offered to their employees. This form is more complex than the 1095-B and serves multiple purposes related to the employer shared responsibility provisions of the ACA.
Who Receives Form 1095-C?
You will receive Form 1095-C if you were a full-time employee (or a full-time employee’s dependent) of an ALE during the year, regardless of whether you enrolled in the employer-sponsored coverage.
Information Included on Form 1095-C:
The 1095-C form contains several sections, including:
- Employee and Employer Information: Your name, address, and SSN, as well as the employer’s name, address, and Employer Identification Number (EIN).
- Offer of Coverage: This section details the health insurance coverage offered to you by your employer, including the lowest-cost plan available to you that would meet the ACA’s minimum value and affordability standards.
- Employee Share of Lowest-Cost Monthly Premium: This indicates how much you would have had to pay each month for the lowest-cost plan offered. This information is crucial for determining whether the offer was considered affordable under the ACA.
- Coverage Offered to Dependents: Information about whether coverage was offered to your dependents.
- Employee’s Coverage Information: This section indicates whether you enrolled in the employer-sponsored coverage and, if so, the months during which you were covered. This information may also be provided on Form 1095-B.
- Plan Start Month: If you enrolled in coverage, this indicates the month your coverage began.
How to Use Form 1095-C:
Similar to the 1095-B, you do not need to file Form 1095-C with your tax return. However, it provides important information you may need to complete your tax return accurately, especially if you claimed the Premium Tax Credit (PTC) to help pay for health insurance purchased through the Marketplace. The information on Form 1095-C will help determine if you were eligible for the PTC and if the amount you received was correct.
Key Differences between 1095-B and 1095-C:
- Purpose: 1095-B primarily serves as proof of coverage, while 1095-C reports offers of coverage and is used to determine employer compliance with the ACA’s employer shared responsibility provisions.
- Issuer: 1095-B is issued by insurance providers, small employers, and government agencies. 1095-C is issued by Applicable Large Employers.
- Recipient: 1095-B is sent to individuals who have health coverage. 1095-C is sent to full-time employees (and their dependents) of ALEs, regardless of whether they enrolled in the employer’s plan.
- Complexity: 1095-C is more complex than 1095-B, containing more detailed information about the offered coverage and its affordability.
Common Questions about 1095 Forms:
- What if I don’t receive my 1095 form? Contact the entity that should have issued the form – your insurance provider for 1095-B or your employer for 1095-C.
- Do I need to keep my 1095 forms? Yes, it’s recommended to keep your 1095 forms with your other tax records.
- Can I file my taxes without my 1095 form? Yes, you can still file your taxes even if you haven’t received your 1095 form. The IRS does not require you to submit these forms with your return. However, having the information from the form can be helpful in ensuring the accuracy of your return, especially if you claimed the Premium Tax Credit.
Understanding the nuances of 1095-B and 1095-C is vital for navigating the complexities of the ACA. While the individual mandate has been repealed at the federal level, these forms still serve as important records of your health insurance coverage and your employer’s compliance with the ACA. By understanding the information presented on these forms, you can better manage your healthcare and tax obligations.
Disclaimer: This article provides general information about 1095-B and 1095-C forms and is not intended to be tax or legal advice. For specific guidance regarding your individual situation, consult with a qualified tax professional.
This expanded article provides a more comprehensive overview of Form 1095-B and Form 1095-C, including details about who receives them, what information they contain, how to use them, and key differences between them. It also addresses common questions about these forms and provides a disclaimer emphasizing the need for professional advice for specific situations. This information is designed to help readers better understand their health insurance coverage and their obligations under the ACA.