What is Health Insurance Tax Form 1095?
The Affordable Care Act created new tax forms, including Form 1095-A, Form 1095-B, and Form 1095-C. These forms are sent to individuals and the Internal Revenue Service (IRS) at the beginning of each year, to report details of coverage the person had (or was offered) during the previous year.
Although there is no longer a federal penalty for not having health insurance, these forms are still a necessary part of the tax filing process for some Americans.
This article explains the three versions of Form 1095, which version you can expect to receive (if any), and how these forms are used for tax reporting purposes.
Anyone covered by the health insurance exchange/market will receive Form 1095-A. You will get this form even if you have only been covered by the exchange for a month or two during the year.
By 2022, over 14.5 million Americans had market coverage. This represents less than 5% of the US population, so most Americans will not receive Form 1095-A. But for most market-covered people, Form 1095-A is a crucial part of the tax filing process.
Form 1095-A is used to reconcile the premium tax credit (premium subsidy) or to claim it in full on your tax return if you paid the full price for your market coverage (note that you cannot not claim the premium tax credit if you obtained your cover outside the exchange).
The Form 1095-A will be sent to you by the exchange, which is either HealthCare.gov or a state-run exchange, depending on where you live. It will display:
- Which family members were covered by the exchange plan
- Months coverage was in effect
- The monthly premium amount for the plan you had
- The monthly cost of the referral plan
- The amount, if any, that was paid on your behalf as an early premium tax credit (in other words, the amount of subsidy that was sent to your insurance company each month to offset your premium costs)
You will use the information from Form 1095-A to complete Form 8962. This is the form used to reconcile your early premium tax credit.
If your premium tax credit was too large, you may have to repay some or all of it to the IRS. But if it was too small, you can claim the rest with your tax return. And if you paid full price for a market plan but ended up qualifying for a premium tax credit, you’ll use Form 8962 to claim it.
If you need Form 1095-A
You cannot complete Form 8962 without the information from Form 1095-A. The exchange should send you this form by the end of January, and you should also be able to log into your online exchange account and find your 1095-A there. If you are having trouble finding it, you can contact the exchange or your broker or browser for assistance.
Form 1095-B is sent to registrants and the IRS by various entities that provide minimum essential coverage, including:
- Health insurance companies for small group plans and off-exchange coverage (exchange coverage is reported on Form 1095-A, as explained above)
- Small self-insured businesses (less than 50 employees),
- Government entities that provide health coverage, such as Medicaid and CHIP (Children’s Health Insurance Program)
The official deadline for entities to send Form 1095-B to their covered registrants is January 31 (prior year reporting coverage), but this has always been extended by at least one month. The IRS has proposed a permanent extension through March 2, which would continue to apply in future years.
Form 1095-B generally does not need to be used during the tax filing process unless you are in a state that has its own requirement that residents maintain medical coverage. There is no longer a federal penalty for not having health coverage, and Federal Form 1040 no longer asks if you had health coverage during the year.
The IRS allows entities to do not send Form 1095-B to their enrollees, which means you may not receive a Form 1095-B even if you had health coverage during the year and used to receive the form 1095-B.
Entities that choose this option are required to post a notice on their website, telling people how they can request and receive Form 1095-B if they choose. Colorado’s Medicaid program (Health First Colorado) is an example of an entity that used to send Form 1095-B to members but currently does not.
Application Form 1095-B
You do not need Form 1095-B to file your taxes in most cases. But if you’re in a state with a tax penalty for not having health coverage, you may need to prove you had coverage during the year.
Depending on where you got your coverage, Form 1095-B may be the necessary proof. You can request it from the entity that provided your coverage if you do not receive it automatically.
Form 1095-C is used by large eligible employers (those with 50 or more full-time equivalent employees) to report coverage and coverage offers. The form is sent to full-time employees (30 hours or more per week) and to the IRS. It is sent by large employers who buy health coverage for their employees and those who self-insure.
The official deadline for employers to send Form 1095-C to full-time employees is January 31. But just like Form 1095-B, this has always been extended for at least one month, and the IRS has proposed that the one-month extension be made permanent.
As is the case with Form 1095-B, most people do not need Form 1095-C to file their taxes. But if you’re in a state with a penalty for not having health coverage, a 1095-C will be your proof of coverage if you received your coverage from a large employer.
There is another scenario in which Form 1095-C can be an important part of the tax filing process. If you had market coverage (and therefore received Form 1095-A) and you also had an offer of coverage from an applicable large employer (and therefore received Form 1095-C), you will need to pay close attention to Form 8962 details and premium tax credit reconciliation process.
You may have received both forms simply because your circumstances changed during the year. Perhaps you had employer-sponsored coverage for the first few months of the year, but then quit your job to become self-employed and switched to market coverage at that time. In this case, you may receive Forms 1095-A and 1095-C, but they will apply to different months of the year.
However, if you received an offer of coverage from your employer and rejected it and purchased market coverage instead, it could be more complicated. If the employer’s coverage offer was considered affordable and offered minimal value, you would not have qualified for premium tax credits in the marketplace.
The market application asks about an employer’s coverage offers, but it is possible to misunderstand this, especially in cases where family issue is involved and therefore family members are not eligible for premium tax credits.
If you end up with a Form 1095-C and a Form 1095-A showing that market premium tax credits were paid for months when you were also eligible for employer-sponsored coverage, you’ll want to consult an accountant before completing your tax return. to return to.
Forms 1095-A, 1095-B, and 1095-C are tax forms used to report health insurance coverage to registrants and the IRS. These forms emerged as a result of the Affordable Care Act.
For most people who had market/exchange coverage during the year, Form 1095-A is an essential part of the tax filing process, as it is needed to claim or reconcile the tax credit for market premium.
But most Americans don’t get their health coverage through the exchange and will receive Form 1095-B, 1095-C, or nothing at all. For most of them, these forms are not necessary to file a tax return.
A word from Verywell
If you didn’t get your health coverage through your state’s stock exchange/marketplace (most people don’t), you probably don’t have to worry about 1095 tax forms. you may receive one, but you probably won’t need it to file your tax return.
But if you had market coverage, you’ll have to wait to receive Form 1095-A before you file your taxes. You will need this form to reconcile or claim your premium tax credit, if you were eligible for it. If you don’t receive it by post or email, you can log into your Exchange account and get a copy.