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The ABCs of Forms 1095-A, 1095-B & 1095-C

The ABCs of Forms 1095-A, 1095-B & 1095-C

by Philip Strang

The deadline to file taxes is rapidly approaching. Though the April 18th deadline is not news to the masses, we, at American Exchange, receive plenty of calls asking for Form 1095-A in order to file taxes. It is a relief to know that so many of our customers are cognizant of the fact that they need to submit Form 1095-A in order to file income taxes. In retrieving this document, we hope to ease the burden of filing taxes for our customers.

Today, a customer called in asking about IRS Form 1095-B. I must admit I did not know the answer at first, but this was nothing a quick Google search couldn’t remedy. Very quickly, I received a concise explanation on the nature of 1095-B forms. Then, I discovered that a Form 1095-C form exists as well.

Filing taxes is deeply ingrained in popular culture. I must file taxes, my neighbor must file taxes, and my neighbor’s neighbor has to file taxes—this rule escapes no one. Then, all Americans have to prove that they are currently insured under a qualified health plan. How we all prove this can be quite different. Depending on one’s source of health insurance, a taxpayer must submit Form 1095-A, Form 1095-B or Form 1095-C form to prove one’s access to health insurance. Our incentive is to avoid a hefty, monetary penalty to be deducted from individual tax returns.

Form 1095-A

This is definitely the most common form our customers request. This makes sense because our core business is selling health insurance plans to individuals and families through the Health Insurance Marketplace. The form is easily accessible through an individual’s personal account on healthcare.gov. Through logging into one’s Marketplace account and by accessing the Tax Forms tab on the 2015 application, one will find a pre-filled 1095-A form.

A. What Does the Form Say?

Basically the form is a contact information sheet. All the normal details—such as Social Security Numbers and Home Addresses—are displayed. Other than this, the form lists the health plan selected, the exact health plan, and all parties covered.

The form shows which months an individual had health coverage as well as the monthly premiums required to keep the health plan active in 2015. If there are any doubts, 1095-A forms come with directions explaining the required values for each line item.

B. How Do I Use This Information?

Tax filers must file 1095-A forms in conjunction with Form 8962 to receive a tax return. Officially titled “Premium Tax Credit,” this is the form determining one’s eligibility for a tax credit. The purpose of the form is to designate an accurate tax credit based on factors such as income, family size, and age. Tax credits help Americans pay for health insurance through the Health Insurance Marketplace.

C. What if I Never Received a Pre-Filled 1095-A?

Health Insurance Marketplace consumers always have the option to personally fill in 1095-A forms. Although it is not as convenient as receiving a pre-filled form, the process is quite simple. These forms are readily available to download on IRS.gov. Filling out the form is a straightforward endeavor, for individuals know most of the information requested.

One line item asks for information that is not readily available. If you are filling out the form, and you get to line item 2, you will see that it asks for the “Marketplace-assigned policy number.”

 

This identifier is several digits long, and one must call the insurance carrier or the Marketplace for this information. If one calls either of the two sources, it is wise to have the formal name of the policy handy.

In addition, the form often will ask for the Second Lowest Cost Silver Premium (SLCSP). This value is easily obtainable, but some work is required. One can access a tax tool on healthcare.gov to find the (SLCSP). One will have access to the SLCSP in a matter of minutes by furnishing all of the required information when prompted.

Form 1095-B

Individuals and families that receive health coverage through employers must submit Form 1095-B in order to file taxes this year. According to turbotax.com, Form 1095-B is an alternative in proving individuals and family members bought health insurance meeting the standards of minimum quality as determined by the Affordable Care Act. The form comes pre-filled from one’s insurance company or employer. Employers who have less than 50 employees have access to the Form 1095-B.

A. What Does the Form Say?

This form is a little different from the Form 1095-A. The form shows much of the same contact information for individuals as is included in the Form 1095-A, but since the Form 1095-B comes from either insurance companies, employers or both, the form lists the contact information of both the employer and insurer.

In addition, the form shows the individuals that were covered under a particular health insurance plan along with the months of coverage.

B. How Do I Use This Information?

If one wishes to prove he purchased a qualified health plan through an employer, then he can use the 1095-B form as a vehicle of proof of insurance. The main difference between Form 1095-B and 1095-A is that Form 1095-B shows one purchased coverage through an employer—not the Marketplace. Also, if one is receiving Form 1095-B, then he does not have to fill out Form 8962 to affirm tax credits. All the recipient has to do with this form is to hold on to the form for record-keeping purposes.

C. What if I Never Received a Pre-Filled 1095-B?

This is the perfect opportunity to contact either your employer or your health insurer. This form requires certain data that is not readily available through outlets such as Google or Bing. Since it is not required to submit this form in filing taxes, it is not worth the trouble to fill the form with the required information. However, receipt of the form is crucial for it proves that one had access to health insurance.

1095-C Forms

According to Forbes, the forms 1095-A and 1095-B are new for the 2015 tax season. These two forms come from employers; Form 1095-A comes from the Marketplace. Individuals will receive Form 1095-C if they work for a firm with 50 or more employees. In order to remain ACA compliant, these larger businesses must offer health insurance to full-time employees

A. What Does the Form Say?

Like the previous two forms, these forms list certain employee’s contact information. Parts II and III of the form address Proof of Insurance concerns similar to the previous two forms. Part II gives details on the type of health insurance offered through the company. Part III will come pre-filled with the employee covered under the employer’s health plan as well as any of her dependents.

B. How Do I Use This Information?

Keep the information. There is no need to include this information in filing taxes. Think of this form as peace of mind through proof of insurance.

C. What if I Never Received a Pre-Filled 1095-B?

Again contact your employer. If you work for a large company, then it is the responsibility of the company to furnish you with this form.

Why Is All This Important?

No one wants less of a tax return. If anything, Americans do everything in their power to receive the largest tax return possible. All Americans are now required by law to purchase qualified health insurance, and if Americans do not adhere to the mandates set forth by the ACA, then he or she is subject to a penalty or fee. This amount will be deducted from one’s tax returns.

Formally called the Individual Shared Responsibility Payment, this “fee” or “penalty” could drastically reduce the size of individual tax returns. This fee will cost $695 per adult and $347.50 per child with a maximum fee of $2085 per family. Don’t want to fork out this kind of money? Make sure to send in the proper tax forms to provide the IRS with proof of insurance.

Philip Strang is an enrollment specialist at American Exchange, and is a Marketplace Certified Agent/Broker. To contact him with any questions or comments you can email him at p.strang@americanexchange.com or call at 1-888-995-16742316_1458231015128-1095-A Form