Health Insurance Tax Forms Explained
Wondering about Forms 1095-A, 1095-B, 1095-C, 8962, or 8965?
The deadline to file taxes is quickly approaching! You’ve probably already filed yours, but you might be wondering what’s up with all of those Health Insurance forms you have. Here’s a little info to help clear up the confusion.
There are three 1095 forms and two additional forms that are triggered by them. You will receive these from other sources (Marketplace, your insurance company, or your employer). You may not get any of these forms, or just a selection, or more than one of the same number, and different family members may get different forms… To play it safe, just take what you’ve got to your accountant and assume you need them one way or another.
But in case you’re wondering, here’s what they are all about….
- WHAT? Health Insurance Marketplace Statement.
- You get this form if you had health insurance through the Marketplace at any point during the year. The form should indicate which months you had coverage. If you notice an error with this, contact the Marketplace 24/7 at 1-800-318-2596.
- You received a tax credit during 2018 based on the income you predicted for the year. Now that the year is over and your income for 2018 is known, the tax credit must be reconciled. Did you get enough tax credit based on your income? Too much? This form combined with your tax return and Form 8962 helps determine that. This could affect your return/balance due amount. The IRS also gets this form. Be sure to provide it with your taxes.
- WHAT NOW?
- If you have insurance through the Marketplace for 2019, be sure to update your application during the year if your income or family situation changes. This will help prevent any big surprises when you go to file your 2019 taxes. We can update your application for you if you’d like and save you a lot of time.
- View/Download Form 1095-A
- WHAT? Health Coverage Statement
- You get this as an individual from a provider (an insurance company for example) to prove that you had minimum essential coverage (or MEC) during 2018.
- If you didn’t have minimum essential coverage for any portion of 2018 and you didn’t qualify for an exemption, you’ll have some sort of penalty to pay. You don’t actually turn this form in with your return because the IRS got one from the provider, too, but you need to keep it for proof.
- WHAT NOW?
- There is NO penalty for 2019! You are not required to get minimum essential coverage during 2019. You might still want it, but if not, you have more options to choose other types of plans that can really help you save money, especially for those who weren’t receiving a tax credit. If you’d like to learn about the other options, let us know. Many of our clients have opted to go with non-marketplace plans for 2019.
- View/Download Form 1095-B
- WHAT? Employer-Provided Insurance Offer & Coverage Insurance
- If your employer has 50 or more employees, you’ll get this form. It states what type of insurance coverage they offer and whether you took it or not.
- It proves that you had minimum essential coverage (MEC) for 2018. You don’t actually turn this form in with your return because the IRS got one from your employer, too, but you need to keep it for proof, just in case. Without proof of MEC, you’ll owe a penalty for any month you weren’t covered (unless you have an exemption).
- WHAT NOW?
- Good news – there’s no penalty for 2019! This opens up lots of options for your health coverage for 2019. If you’d like to learn more about what’s out there, let us know and we’ll explain what’s available and how it compares to minimum essential coverage.
- View/Download Form 1095-C
These 1095 forms can trigger two other forms that are completed by you or your tax preparer and submitted with your return.
- WHAT? Premium Tax Credit (PTC)
- This form is used to report the amount of premium tax credit you received, compare it to your income, and determine if you received the correct amount of tax credit. The tax credit is what lowers your monthly Marketplace plan premium.
- This form is tied to 1095-A. It is used to reconcile the amount of Marketplace premium tax credit you got. In other words, it answers the questions…How much tax credit did you receive during the year for your Marketplace insurance? How much income (MAGI = modified adjusted gross income) did you end up making this year? How much tax credit should you have gotten based on your MAGI? And do you need to pay any of it back or do they owe you more than what you got during the year? You only need to complete this form if you had Marketplace Health Insurance for any month of the year.
- WHAT NOW?
- If you have Marketplace insurance for 2019, be sure to update your application if you experience any income or household changes during the year to prevent any big surprises come tax time for 2019. We can update your application for you if you’d like and save you a lot of time.
- View/Download Form 8962
- WHAT? Health Coverage Exemptions
- This form is used to report Marketplace-Granted exemptions. It’s also used if you are claiming a coverage exemption on your return.
- There is a penalty for not having minimum essential coverage for any portion of 2018. You may not have to pay the penalty, though, if you qualify for an exemption. If your household income or your gross income is less than your filing threshold, you don’t need this form because you’d qualify for “full-year health care coverage or exempt.” But in other situations, such as partial year coverage or exemption, or family members having different statuses in regards to coverage or exemptions, you will need to fill out this form. If you didn’t have minimum essential coverage, make sure you check to see if you need this form or not, or you could end up owing a penalty.
- WHAT NOW?
- There is no penalty for 2019! So if you can’t afford the minimum essential coverage but also don’t qualify for any government programs, contact us. There are many options available now that are far better than going without insurance entirely. We will help you figure out what’s out there and whether it’s a good fit for you or not.
- View/Download Form 8965
Every person, family, and tax situation is different. Please consult with your tax professional for personalized advice for your tax situation. We are here to provide personalized, professional advice for your health insurance situation.