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1095 Forms: Differences Between 1095-A vs 1095-C and 1095-B
What if you encounter one or more 1095 forms this tax season, and you might wonder what they mean in your tax return. Since under the Affordable Care Act (ACA), the IRS requires all qualified health plan providers and applicable employers to provide a report with detailed information about health plan enrolment using tax forms 1095 A, 1095 B, and 1095 C.
Each individual, whether you’re an employer or employee, needs to understand the key difference between 1095-A, 1095-C, and 1095-B.
In this article, we explore each of these forms in detail and understand their use, and the difference between 1095-A vs 1095-B and 1095-A vs 1095-C and 1095-B vs 1095-C.
Understanding 1095 Form – Health Insurance
The Form 1095 contains complete documentation of your health insurance. Your insurance provider will provide you 1095 form annually, according to your health insurance plan, which means you do not have to fill out the forms on your own.
However, you might receive either a Form 1095 A, 1095 B, or 1095 C, or a combination of these as per your health insurance.
With these IRS tax forms, you can fill out your tax returns. These forms determine if employees and employers have fulfilled their mandate under the ACA or not.
Another important question is when do 1095 form come out. The form is postmarked annually by 28th February. If you do not receive the form by 15th March, get in touch with your health insurance provider or request a duplicate copy.
You must have this form to file your income tax return if you have health coverage throughout the year.
Let’s explore the types of 1095 Forms in the next section:
Types of 1095 Form
There are three types of 1095 forms you may receive from your health insurance provider.
Form 1095-A
1095 A form is also known as the Health Insurance Marketplace Statement. According to ACA mandates, every state must have a health insurance exchange, which is also known as a Marketplace.
Which means small businesses, employees, and even families can purchase private health insurance plans online from these marketplaces. The state or the federal government runs these.
On the other hand, if employees purchase healthcare coverage from a Marketplace within a tax year, they are entitled to receive form 1095-A health insurance marketplace statement from the provider.
What is the deadline for 1095-A?
The 1095-A deadline is mid-February every tax year. Qualified individuals must receive this form via mail from Health Insurance Marketplaces.
This health insurance plan covers employees who do not have access to or did not participate in any health insurance plan sponsored by the employer organization the previous year.
What is Form 1095-A used for?
Using the 1095-A Form, an employee can do:
- File an income tax return accurately with the IRS
- Fill out Form 8962 to request a refundable premium tax credit
- Reconcile credit on returns with advance payments on premium tax credit
What information is provided in the 1095 A form?
Since Form 1095-A provides a report on the type of coverage an employee receives, it contains the following data:
- Insurance coverage amount
- Names of people covered under the plan
- Total value of the premium paid
- Premium tax credits for paying the health plan
Form 1095-B
1095 B form, aka Health Coverage, provides information regarding healthcare coverage to the Internal Revenue Service about individuals specifically covering their families.
This report contains details like the type of health insurance plan, coverage time period, and names of dependents included in this plan.
Meanwhile, the tax form also reports to individuals who are covered under the minimum essential coverage, which is mandatory under the Affordable Care Act (ACA).
Since, individuals must have the 1095 B form as authentication to establish that they and their respective dependents have had minimum essential coverage in the last year.
From where do you get Form 1095-B?
The 1095-B Form is mailed to individuals, including:
- Government agencies like CHIP or Medicare
- Insurance companies, apart from the Marketplace
- ‘Self-insured coverage’ – employers or small businesses often provide certain kinds of health coverage options.
What information is provided in the form 1095-B?
Form 1095 B contains all relevant data about minimum important coverage that employees got in the last year. It is inclusive of:
- Kind of plan
- Coverage period
- Name of the covered employee, along with names of dependent people covered in the plan
- Name of the business
- Name of the insurance company providing the plan
Form 1095-C
The 1095-C form (employer-provided health insurance offer and coverage) is a tax form generally used by applicable large employers (ALEs). The form reports health insurance coverage information for all its employees to the IRS.
According to the ACA employer mandate, qualified ALE employers have to provide healthcare coverage to their employees.
Meanwhile, this coverage is reported to the IRS via form 1095-C. 1095-C form is also sent to all full-time employees of an organization who work for 30 hours or more weekly. This remains valid even if they had the employer-sponsored insurance plan last year.
Who receives the 1095-C form and what is form 1095-C purpose?
All full-time employees who worked for a minimum of 1 month in the organization the previous year will receive the 1095 C form.
What is a 1095 C form used for? With the information furnished in this form, the employee can file accurate tax returns. However, a copy of this form need not be sent to the IRS.
At the end of the employer, the information in form C determines whether the company has complied with the ACA and if there are any payment dues for the IRS.
What information is provided in the 1095 C form?
The form 1095-C contains detailed data about the company-sponsored healthcare coverage provided to the organization’s employees in the last year. This includes:
- Name of the employee
- Name of the employer
- Coverage type
- Dependents covered under the plan
- The period during which the employee was covered in the plan
- Mention of the cheapest premium the employee could pay for the plan
Table of Comparison: 1095-A vs 1095-C vs 1095-B
Here is the table of comparison between 1095-A vs 1095-C vs 1095-B:
Form 1095-A | Form 1095-C | Form 1095-B | |
Purpose | The purpose of this form is to report information to the IRS about employees who have undertaken a health insurance plan via the Health Insurance Marketplace. The form is also given to individuals so that they can receive premium tax credits. | With the information provided in this form, the employee can file accurate tax returns. For the employer, the information in Form C determines whether the company complies with the ACA guidelines and if the company owes anything to the IRS. | The purpose of this form is to authenticate that the person has some kind of health coverage, which is a requirement of the ACA. |
Issuers | This form is provided by the Marketplace provider from where the insurance plan has been taken. | Applicable large employers (ALEs) issue form c, offering information to the IRS about health insurance coverage for every employee in the organization. | Form B can be issued by various insurance coverage providers, including insurance companies apart from Marketplace, government agencies, small businesses, employers offering self-insured coverages, etc. |
Receivers | Employees who purchased their health plan from a Health Insurance Marketplace will receive this form from the insurance provider. | All full-time employees of a company must receive this form to file accurate tax returns. | Individuals/employees who have minimum essential healthcare coverage are eligible to receive this form from the entity that has issued the insurance coverage. |
Deadlines | Mid-February every tax year. The last date is 28th February of every year. | 31st January of the year. | 31st January of the year. |
How BIT Accounting Helps With 1095 Forms?
BIT Accounting serves as a valuable partner in managing the complexities associated with 1095 forms, providing essential support for compliance, accuracy, and timely submission. Whether you are an employer navigating the requirements or an employee ensuring your tax filings are correct, their expertise can make the process smoother and more efficient.
Conclusion
Understanding the differences between 1095-A vs 1095-C vs 1095-B is important for navigating your health insurance plan and ensuring compliance with the Affordable Care Act (ACA). Having the right information can help you maximize your tax benefits and ensure you’re properly covered. If you find yourself overwhelmed by tax forms or need support with your accounting, consider partnering with BIT Accounting. Our expert team is dedicated to simplifying your financial processes and ensuring you get the most out of your tax season experience.
FAQs
1: What is the difference between a 1095-A and a 1095c?
1095 A form deals with individual health coverage provided via the Health Insurance Marketplace. 1095 C form, on the other hand, covers health coverage employers provide to their employees. The size of the employer organization must be more than 50 employees.
2: What is the difference between a 1095-A and a 1095-B?
1095 A form deals with individual health coverage provided via the Health Insurance Marketplace. The 1095 B tax form provides reports to individuals covered under the minimum essential coverage, which is mandatory by the Affordable Care Act.
3: Can I Receive IRS Form 1095-A, Form 1095-B, and 1095-C All in One Year?
Yes, an individual can receive IRS Form 1095-A, 1095-B, and 1095-C all in one year. This depends on the health insurance plan you enrolled in the previous year and your employer and company size.
4: What happens if I don’t get my 1095-A from the marketplace?
If you do not get your 1095-A from the marketplace, contact the insurance provider from the Marketplace from which you purchased the health insurance plan. You might need to amend the return if you received a voided or corrected Form 1095-A.
5: What is a 1095 form used for?
IRS form 1095 provides detailed information about the various healthcare insurance coverages you purchased or offered by your employer during the last calendar year. The information from the various 1095 forms helps file individual income tax returns.
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