What is Form 1095-B?

This tax season, you might receive one or more forms related to your health coverage. This includes Form 1095-A, Form 1095-B, and Form1095-C. Form 1095-B provides vital information about your health care coverage you should keep in your records.

These forms are part of the Affordable Care Act, also known as Obamacare. This act was signed into law by President Barack Obama in 2010, and it gives more citizens the chance to participate in medical insurance coverage. Obamacare requires that taxpayers provide proof of their health insurance on their tax return to avoid penalties.

What is Form 1095-B under the Affordable Care Act?

Form 1095-B, Health Coverage reports which type of health insurance you have, whether your spouse is covered under your insurance, and if dependents are covered under your plan.

The Affordable Care Act requires that your health insurer provide “minimum essential coverage.” These are the basic necessities that the federal government demands each plan offer. Form 1095-B confirms that your provider offers you these benefits so you can avoid paying a penalty.

You’ll receive Form 1095-B if you’re covered by health insurance companies, select self-insured employers, and general agencies that operate Medicare, Medicaid, or CHIP. If you have insurance from multiple providers, changed coverage or employers during the year, or if members of your household have different providers, you may receive more than one Form 1095-B.

What Information Is Included on Form 1095-B?

Your provider or employer will send you a copy or Form 1095-B for your records. They also send a copy to the IRS, so you don’t need to attach a copy to your tax return. Form 1095-B is divided into four parts, issuing information about your coverage within the last year. Refer to this document for your personal finances or when the IRS sends you a notice with a discrepancy or bill charging missing taxes.

Part I: Responsible Individual

The first portion of Form 1095-B includes basic information including your name, address, Social Security number or TIN, and date of birth. It will also include the letter identifying Origin of the Health Coverage. The letter-code is listed in the instructional portion of the form.

Part II: Information About Certain Employer-Sponsored Coverage

Part II identifies the name of your employer, their address, and their employer identification number (EIN). This verifies the insurance with you, the employer, and the IRS. Sometimes this portion is left blank. If you receive Form 1095-B without this portion filled, you don’t need to fill in the information or return it to your reporter or coverage provider.

Part III: Issuer or Other Coverage Provider

If you get insurance through an insurance company, employer providing self-insured coverage, federal agency sponsoring coverage like Medicaid or Medicare, the information will be provided here.

Part IV: Covered Individuals

The final portion of Form 1095-B reports the name, Social Security number or TIN, and other coverage information for each individual under the plan. It also identifies the months of coverage. There are 18 lines available for you to identify each member on your insurance plan.

Do I Need This Information to File My Return?

You do not need Form 1095-B to file your return. Your employer or provider gives you a copy of Form 1095-B for your records, so you can refer to it if there’s an issue with your coverage. The IRS also receives a copy of Form 1095-B, and you’ll only receive a letter if they notice inconsistencies.

Like all tax documents, you should keep a copy of Form 1095-B in your records for at least three years. The IRS may send you a notice or a bill if their records don’t match what you reported on your tax return. When this happens, you can refer to your copy and determine whether they’re correct. You can avoid mistakes and maximize your tax refund with our tax preparation services.

Do I Get a Tax Credit with Form 1095-B?

You only receive a premium tax credit if you have Form 1095-A, Health Insurance Marketplace Statement. This form provides proof that you bought your health insurance through an online provider. If you switched providers throughout the previous year to or from a Marketplace plan, you may receive Form 1095-A, and then be eligible for a premium tax credit.

Will I Be Subject to a Penalty If I Don’t Have Coverage?

The Affordable Care Act requires that all taxpayers have health insurance. If you don’t have health insurance, the government can issue a hefty penalty. If you didn’t have health coverage for over three successive months during the last tax year, or you don’t meet other exemption requirements, the government may issue a penalty called the “individual shared responsibility payment.” The cost of the penalty includes the greater 2.5 percent of your household income, or $695 per adult and $347.50 per child under the age of 18.

Families are penalized no more than $2085.

Am I Exempt From Health Insurance Coverage?

In most cases, if you’re not insured under a plan that provides minimum essential coverage, you will be penalized. There are some exceptions, including:

  • You went without health insurance coverage for no more than three months.
  • Your provider is specifically exempt from the Affordable Care Act.
  • Your minimum required payment for annual premiums is more than eight percent of your total household income.
  • Your financial situation doesn’t allow you to obtain health insurance, like financial hardship.

Can Community Tax Help Me with Form 1095-B?

Our team of licensed tax professionals have helped over 44,000 clients resolve over $250 million in tax debt. Whether you just switched insurance providers in the last year, or you need help paying a bill from the IRS, let our team create a strategy so you can resolve your tax debt. Reach out to Community Tax today at 999.676.4319 for a free consultation and learn about our helpful tax services.