Recognizing that many individuals will receive new ACA information statements for the first time in 2016, the IRS issued a memo aimed at helping consumers understand the documents.
The explanation covers Form 1095-B, Health Coverage, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
Important facts about these forms the IRS believes consumers need to know include:
While the information on these forms may help individuals complete their tax returns, the forms are not needed to file. The federal tax return can be filed even if the taxpayer has not received one of these statements.
Form 1095-B is used by employers who provide health insurance to report certain information both to the IRS and to taxpayers that an individual has minimum essential coverage. Having that coverage means the individual is not liable for the penalty known as the “individual shared responsibility payment.”
Form 1095-C is used by “applicable large employers” – those who in the previous year had 50 or more full-time employees, including full-time equivalent employees – to report information about their offers to employees of health coverage, and about their employees’ enrollment in health coverage.
Form 1095-C is also used by employers who offer employer-sponsored self-insured coverage to report information to the IRS and to employees about who has minimum essential coverage under the employer’s plan.
If an individuals has worked for multiple applicable large employers, he or she may receive a Form 1095-C from each employer.
To help prevent identity theft, Forms 1095-B and 1095-C sent to individuals may include only the last four digits of a social security number or taxpayer identification number. The first five digits would be replaced with asterisks or Xs.
In general, 1095-B and 1095-C must be sent on paper by mail or hand delivered, unless an individual agrees to receive the statement in an electronic format.
Employers who provide health insurance coverage should furnish a copy of Form 1095-B to those who are identified as the “responsible individual” for the coverage. For employer-sponsored coverage, the “responsible individual” will generally be the employee, or the taxpayer who would be liable for the individual shared responsibility payment.