What Is Form 1095-C?

When the Affordable Care Act was signed into law in 2010 by President Barack Obama, it changed the way we do taxes. This law expanded medical insurance to cover more citizens in the U.S., and gave us new tax forms for our annual filing processes.

Form 1095-C is one of three forms that shows your current health insurance coverage. Each form designates what type of insurance you had, and confirms your tax status with the government. Form 1095-C provides proof to the government that you’re insured by your employer. Community Tax can prepare your taxes so you provide an accurate return regarding your current health insurance.

What Is Employer-Provided Health Insurance Offer and Coverage?

If you work full-time for an applicable large employer, you’ll probably receive Form 1095-C. Applicable large employers, or ALEs, must have at least 50 full-time or full-time equivalent workers on staff. Full-time workers labor for at least 30 hours a week. A full-time equivalent worker is one who is paid hourly but whose hours add up to a full-time work load. All applicable large employers are required to file Form 1095-C.

What Information Is Included on Form 1095-C?

Form 1095-C is a tax document that provides valuable information regarding your current health insurance status. You can keep this document in your records in case you have an issue with your insurance or the IRS sends you a bill. There are three sections to Form 1095-C, and each contains straightforward information regarding your insurance coverage.

Part I: Employee

Part I of Form 1095-C provides information about you, the employee under the insurance plan. Here is where you’ll find your Social Security number and address. This section also reports basic information about your employer.

Part II: Employer Offer of Coverage

This section describes the type of coverage that your employer offered you, your spouse, and your dependents. The information in this portion determines your eligibility for any coverage subsidized by a premium tax credit.

Part III: Covered Individuals

The final portion of Form 1095-C provides detailed information about each individual, including any full-time employee and non-full-time employee, and any family members covered under the employer’s health plan. There are 18 lines provided for participants on the plan. Each shows their name, Social Security number or TIN, date of birth, and number of months covered.

Is Form 1095-C Similar to Form 1095-B?

Form 1095-C and Form 1095-B share some similarities, but they serve different purposes. Form 1095-C is meant to show you what medical coverage was available through the employer. Form 1095-B is sent by the insurance provider and shows details about your insurance coverage, such as who is covered in your family.

If you work for a company that is “self-insured,” you’ll receive Form 1095-B. Self-insured companies pay their employees’ medical bills themselves, rather than paying a premium to an insurance company. These employers may send out a combined Form 1095-B and Form 1095-C.

Do I Need Form 1095-C to File My Tax Return?

Form 1095-C is for informational purposes only, so you don’t need it to file your tax return. Your provider will send Form 1095-C to you and the IRS so the IRS can contact you if they find a problem with your insurance.

Do not send your copy of Form 1095-C with your tax return. If the IRS takes issue with your tax return, they’ll send you a notice or bill with more information. When you receive a letter from the IRS, compare your records with their claim to decide whether their claim is correct. If you end up owing taxes to the IRS, let the tax advocates from Community Tax find a plan so you can resolve your tax debt fast.

Am I Eligible For a Tax Credit with Form 1095-C?

You can only receive tax credit if you purchased your health insurance through the Marketplace. If your coverage is through the Marketplace, you can expect to receive Form 1095-A, Health Insurance Marketplace Statement. You might be eligible if you switched employers or insurance providers in the past year, in which case you’ll receive Form 1095-A and you can qualify for the Premium Tax Credit.

Will I Get a Penalty If I Don’t Have Insurance?

The Affordable Care Act makes health care mandatory. If you don’t have health insurance, or have gone for three consecutive months without health insurance, you may be subject to a substantial penalty. This penalty is called the “individual shared responsibility payment,” and requires the greater of 2.5 percent of your household income, or $695 per adult and $347.50 per child under the age of 18. Your family won’t be charged any more than $2085 total.

Are There Exemptions From Health Insurance Coverage?

There are some exceptions to the Affordable Care Act that make it acceptable to not have health insurance coverage. These exemptions include:

  • The Affordable Care Act specifically exempts your coverage.
  • You had a gap in coverage that didn’t exceed three successive months.
  • Your financial situation doesn’t currently allow you to afford health insurance.
  • Your minimum required payment for annual premiums is exceeds eight percent of your household income.

Can Community Tax Help Me Understand My Health Insurance?

Yes! We have worked with over 44,000 clients find solutions to their tax issues. Whether you want to understand how your health insurance affects your taxes, or you want to dig your way out of tax debt, Community Tax is there to help you reach your financial goals. We’ve worked with almost every tax situation imaginable, from simple tax preparation to representing clients before the IRS. Our team of licensed tax experts offer a variety of tax services to help you reach your financial goals. If you’re ready to take control of tax debt or maximize tax refunds, contact us today at 999.676.4319 for a free consultation.