IRS Form 1095: The ABCs and 411

IRS Form 1095-A (and B or C): Well-formed products of The Affordable Care Act

TAXES AND THE TAXPAYER: Among other things, the Affordable Care Act generated an onslaught of paperwork, including the IRS Form 1095 trilogy composed of the IRS Form 1095-A, IRS Form 1095 -B and IRS Form 1095-C. These forms provide basic information to the IRS about your health care insurance coverage, and are the proof required by the IRS that you had healthcare coverage.

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan, or:

$325.00 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.

Who files the IRS Form 1095-A, B, and C?

All 2015 federal income tax filers are required to include one or possibly more of these forms which they could receive from their healthcare insurance provider, employer or the state or federal government. Any one or all of these forms together should indicate each month that you had (or did not have) healthcare insurance. You can expect to receive yours before the end of January 2016. Keep them all.

IRS Form 1095 -A (Health Insurance Marketplace Statement)

This form is an official statement to the IRS which reports information about the taxpayer who is enrolled in a qualified health plan through the Health Insurance Marketplace. This form, which is sent to the individual from the Health Insurance Marketplace, allows the individual, or taxpayer, to:

take the premium tax credit,
reconcile the credit on their returns with advance payment of the premium tax credit (advance credit payments), and
file an accurate return.

This form is much like the W-2 or the 1099 in that the individual, or taxpayer, who is (or was at any time during the year) enrolled in a qualified health plan through the Health Insurance Marketplace, should expect to receive the form prior to January 30, 2016. Like the W-2 or 1099, the IRS Form 1095-A (and B, or C) is a required component of an individual’s tax filing paperwork. The IRS Says

Another way of stating this is: if you purchased healthcare insurance through healthcare.gov and received an advanced premium tax credit (a subsidy), you can expect to receive an IRS Form 1095-A from the federal government. If your healthcare coverage was through the Health Care Independence Program (also known as the Private Option), expect to receive an IRS 1095-A from Arkansas.

IRS Form 1095-B (Health Coverage)

Form 1095-B is used to report certain information to the IRS and to the taxpayer about the individual or individuals (in the case of a family) who are covered by minimum essential coverage and are, therefore, not liable for the individual shared responsibility payment. The IRS Says

The taxpayer should expect to receive this form by January 30, 2016, for the tax year 2015. A taxpayer could receive this same IRS From 1095-B from both the health insurance provider and from their employer. Why? There is a crossover in who could and/or should send out this form. If a taxpayer/filer receives more than one, it’s not a problem. If the form is NOT received by mid-January, 2016, that IS a problem. Contact the insurance provider and employer immediately.

IRS Form 1095-C (Employer-Provided Health Insurance Offer and Coverage Insurance)

Form 1095-C is filed and furnished to any employee of an ALE (Applicable Large Employer) member who is a full-time employee for one or more months of the calendar. The IRS Says

A taxpayer (or filer) who was employed full time for any month I the calendar year of 2015 by an ALE member, should expect to receive an IRS Form 1095-C form in January, 2016, from that employer. Keep the form with your tax paperwork.

The BOTTOM LINE

If you can afford health insurance but choose not to buy it, you must pay a fee or have a health coverage exemption. If you don’t have coverage for the year 2015, when you file your taxes in 2016, you will be dealing with this fee structure:

The fee for not having coverage in 2015