Alphabet Soup: The Uses of Forms 1095-A, B and C

February 2016

This year you may receive new tax forms to add to the documents already accumulating in your tax file. The Health Care Information Forms for Individuals (Forms 1095-A, 1095-B and 1095-C) are required under the Affordable Care Act (ACA) and include pertinent information about health care coverage you and your family had or were offered in 2015. If you bought insurance through the Health Insurance Marketplace (Marketplace), you will receive Form 1095-A and could qualify for an additional premium tax credit, or you may be required to pay some of the credit back. If you were covered during 2015 and your coverage was not reported on Forms 1095-A or 1095-C, you will receive Form 1095-B as verification of your coverage. If you had, or were offered, employer-provided coverage from a large employer you may receive Form 1095-C in certain circumstances.

Here are some additional details about these various new Health Care Information Forms, what they mean and how they relate to your tax return.

Form 1095-A, Health Insurance Marketplace Statement

Form 1095-A was first issued last year and is provided to individuals who enrolled in coverage through the Marketplace. This form includes information about your health coverage, who was covered, and when. It is used to complete Form 8962, reconciling advance payments of the premium tax credit, or to claim the credit on your tax return. The premium tax credit is a refundable credit that helps eligible individuals and families with low or moderate income afford health insurance purchased through the Marketplace. To get this credit, you must meet certain requirements and file a tax return.

The information provided on Form 1095-A is also used to determine whether you and your family members had health coverage that satisfies the individual shared responsibility provision. The individual shared responsibility provision requires you and each member of your family to do at least one of the following:

  1. Have qualifying health coverage, called minimum essential coverage;
  2. Qualify for health coverage exemption; or
  3. Make a shared responsibility payment with your federal tax return for the months that you did not have qualifying coverage or an exemption.

If your form does not indicate “full-year coverage” because there were months when you or your family members were not covered, you must determine if you qualify for an exemption or whether you must make an individual shared responsibility payment.

The deadline for the Marketplace to issue Form 1095-A was February 1. Although you are not required to attach this form to your return, you should wait to receive it before filing your return because you will need the information provided to complete your return accurately.

Form 1095-B, Health Coverage

Individuals who had health coverage in 2015 that is not reported on Forms 1095-A or 1095-C should expect to receive Form 1095-B from their health insurance provider (i.e., insurance companies, Medicare, certain employers) with information about who was covered and when. This form is used to determine whether you and your family members had health coverage that satisfies the individual shared responsibility provision. Similar to above, if you did not have full-year coverage you may be eligible for an exemption or you may need to make an individual shared responsibility payment.

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Certain employees of applicable large employers may receive Form 1095-C with information about the health coverage offered by their employer and, in some cases, whether the individual enrolled in the coverage. This form is used to determine eligibility for the premium tax credit. It is also used to determine whether you and your family members had full-year coverage, qualify for an exemption, or are required to make an individual shared responsibility payment.

The deadline for insurers, other coverage providers, and certain employers to issue Forms 1095-B and 1095-C was extended until March 31, 2016. The information provided on these forms may be helpful in completing your return; however, you are not required to wait for these forms to file your return.

Note that some individuals may receive multiple Health Care Information Forms. This could happen, for example, if you had coverage from different sources at various times of the year (because you changed jobs or switched providers), you worked for more than one employer that offered coverage, or if other members of your family had coverage from different providers.

To learn more about the new Health Insurance Information forms, please visit the IRS website’s useful Questions and Answers about Health Care Information Forms section, or contact your BNN tax advisor at 1.800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.