The new healthcare law, also called the Affordable Care Act or Obamacare, requires employers to send Form 1095-C to certain employees. Did you receive a Form 1095-C from your employer and you’re not sure what to do next? No problem, we have answers to the most frequently asked questions about this tax form.
What is a Form 1095-C?
The Affordable Care Act, or Obamacare, includes both the individual mandate and the employer mandate. The individual mandate requires that most Americans have qualifying healthcare coverage. If individuals do not have healthcare, they could potentially face a fine. The employer mandate requires employers with 50 or more full-time equivalent employees to offer healthcare coverage to their full-time employees or potentially face a fine. Much like the Form W-2 is used to determine whether or not you owe taxes, the IRS uses the information reported on your Form 1095-C to determine whether you (or your employer) may have to pay a fine for failing to comply with the Affordable Care Act.
The Form 1095-C contains important information about the healthcare coverage offered or provided to you by your employer. Information from the form may be referenced when filing your tax return and/or to help determine your eligibility for a premium tax credit. Think of the form as your “proof of insurance” for the IRS.
If you or a family member were enrolled in healthcare coverage at any time during a calendar year, you will receive a Form 1095 from the entity that provided the coverage. For example, if you were determined to be a full-time employee or were enrolled in coverage through your employer, you will receive a 1095-C from your employer.
What is the difference between a 1095-A, 1095-B, and 1095-C?
The forms are very similar. The main difference is who sends the form to you. The entity that provides you with health insurance is responsible for sending a Form 1095.
- You will receive a 1095-A if you were covered by a federal or state marketplace (also called an exchange).
- You will receive a 1095-B if you were covered by other insurers such as small self-funded groups or employers who use the Small Business Health Options Program (SHOP). You may also receive a 1095-B from your insurance carrier if you are enrolled in a fully-insured employer-sponsored plan.
- You will receive a 1095-C if coverage was provided by your employer.
Who receives a Form 1095-C?
Applicable Large Employers (ALEs), or employers with 50 or more full-time equivalent employees, are required to send a Form 1095-C to all full-time employees (those who work an average of 30 or more hours per week) as well as any employee who was enrolled in their health insurance plan. So if you were a full-time employee and/or were enrolled in health insurance through your employer at any time during a calendar year, you should receive a Form 1095-C.
Why did I get a Form 1095-C?
If you were a full-time employee working an average of 30 or more hours per week and/or were enrolled in health insurance through your employer at any time during a calendar year, you will receive a Form 1095-C.
Why didn’t I get a Form 1095-C?
If you were not full-time (working an average of 30 or more hours per week in any month) and were not enrolled in healthcare coverage through your employer’s self-insured plan at any time during the calendar year, you should not receive a Form 1095-C. You may also not receive a 1095-C if you were not the primary insured. For example, you should not receive a form if you were listed as a spouse or dependent under another family member’s plan.
If you were not full-time but were enrolled in a fully-insured plan, you will not receive a 1095-C from your employer. Instead, you should receive a 1095-B from your insurer.
Will I be fined if I did not receive a Form 1095?
In some cases you can claim a healthcare coverage exemption for the months without coverage if you or any family members did not have coverage for the entire year. You can use the IRS Health Coverage Exemptions Form 8965 to find out if you qualify. If you or any family members did not have coverage or an exemption, you may have to make an individual shared responsibility payment. Please visit www.irs.gov or www.healthcare.gov to learn more.
When will I get my Form 1095-C?
If you are eligible to receive a Form 1095-C, your employer is required to send your Form 1095-C for the tax year on or before March 31 of each year.
What should I do with my Form 1095-C?
Keep your 1095-C for your records with your other important tax documents. While you will not need to attach your 1095-C to your tax return or send it to the IRS, you may need to use information from your 1095-C to complete your tax return.
What information is on the Form 1095-C?
There are three parts to the form:
- Employee and Employer Information (Part 1) reports information about you and your employer.
- Employee Offer and Coverage (Part 2) reports information about the coverage offered to you by your employer, the affordability of the coverage offered, and the reason why you were or were not offered coverage by your employer.
- Covered Individuals (Part 3) reports information about the individuals (including dependents) covered under your self-insured plan.
Why is Part 3 of my 1095-C blank?
Part 3 of your 1095-C is blank if:
- No one was enrolled in coverage for any month of the year
- The coverage is through a fully-insured plan
- The coverage is through COBRA
- You are a union employee
How will the Form 1095 impact my taxes?
If you do not have healthcare coverage and do not qualify for an exemption, you may be subject to a fine when you file for your tax return. If there’s a discrepancy in the information that you and your employer report to the IRS about the healthcare coverage offered to you, acceptance of your tax return may be delayed.
Do I need to send my Form 1095-C when I file my taxes?
No, you do not need to send a copy of your 1095-C to the IRS when filing you tax return. However, you should keep the form with your tax records.