Even if you don’t get your health insurance through Obamacare, you’re likely to get something related to the health law in the mail in the coming weeks: A new tax form.
Known as Form 1095, it’s part of the way the federal government verifies whether people are complying with the mandate that requires nearly all U.S. residents to have health care coverage. This year is the first time most people will be getting those forms, and officials are anticipating a fair amount of confusion. In part, that’s because what you need to do with that form depends on the type of coverage you had.
Here’s what you need to know.
What the forms are
The 1095 contains information about the health care coverage you had in 2015.
There are three kinds of 1095s, based on the type of coverage people have:
- 1095-A: These forms are sent to people who got coverage through their state’s health insurance exchange (for example, Connecticut’s Access Health CT).
- 1095-B: These go to people who had coverage that didn’t come from a public exchange – for example, those who got coverage through a job, have Medicare or Medicaid, or who bought coverage on their own outside their state’s exchange.
- 1095-C: These will be sent by certain large employers that provide coverage to their workers. (You might get this form even if you didn’t sign up for your employer’s coverage; this form is used in part for companies to show what coverage was offered to you.)
Some people will receive more than one 1095, particularly if they had more than one type of coverage in 2015.
What do I do with these forms?
It depends whether you got coverage through the exchange in 2015.
If you didn’t, you don’t need to do anything with the form. In fact, you can file your taxes before your 1095 comes in the mail. When completing your tax return, you will need to indicate whether you had insurance in 2015 (and possibly pay a penalty if you didn’t), and you can use the information on the 1095 to help answer. But you can also complete your taxes without that form.
But if you or someone else included in your tax return got coverage through the exchange and received financial assistance to discount the premium, you will need the information on the 1095-A to complete another tax form, known as Form 8962. The premium discounts are actually tax credits, paid in advance, based on an estimate of your 2015 income. Now that the year is over, you’ll need to report to the IRS your actual income and reconcile that with the discount you received – which is what the Form 8962 is for.
So if you got coverage through the exchange, be sure to have your 1095-A when you prepare your taxes.
Do I have to prove that I had coverage?
No. While there is a place on the tax form to indicate if you had coverage, you don’t need to send proof, according to the IRS. (Even so, the agency recommends that people keep records of their coverage, including premiums they paid.)
And the IRS will be getting information on your coverage, just not from you. The entities that send 1095 forms to consumers will also be sending information to the IRS.
My income is low enough that I don’t have to file taxes, but I got one of these forms. Does this mean I now need to file taxes?
If you didn’t get coverage through the exchange and you otherwise wouldn’t have to file taxes, you do not need to file taxes because you got this form in the mail.
But if you got coverage through Access Health and received financial assistance with your premiums, you must file a tax return, no matter what your income level was. That’s because you’ll need to reconcile the amount of tax credits paid in advance to discount your premium with the amount your income actually entitled you to receive. If you don’t, you won’t be eligible for discounted coverage in 2017.
Put another way: If you wouldn’t otherwise have to file taxes and you got a 1095-B or 1095-C, you don’t have to do anything. But if you got a 1095-A, you’ll need to file a tax return.
When should I expect these forms?
According to the IRS, exchanges must send 1095-A forms by Feb. 1. Access Health plans to send its 1095-As out during the last week of January, spokeswoman Kathleen Tallarita said.
Groups that need to provide 1095-B and 1095-C forms – generally, insurance companies and employers – have until March 31.