Navigating tax season can often feel like deciphering a new language, especially when it comes to healthcare forms. You might find yourself wondering, “What Is 1095-c?” among a stack of documents. It’s not uncommon to receive multiple health coverage forms, and Form 1095-C is one of them. This form is crucial for understanding your responsibilities under the Affordable Care Act (ACA), particularly concerning employer-sponsored health insurance.
Decoding Form 1095-C: What You Need to Know
Form 1095-C, officially titled “Employer-Provided Health Insurance Offer and Coverage,” is a tax form provided by applicable large employers to their employees. An applicable large employer generally has 50 or more full-time employees or equivalent full-time employees. This form details the health insurance coverage offered to you by your employer, if any, during the tax year. It essentially outlines whether your employer offered you health insurance, what type of coverage was offered, and for which months of the year it was available.
The main purpose of Form 1095-C is to help the IRS administer the employer shared responsibility provisions under the Affordable Care Act. It also helps you, as an employee, understand your eligibility for the premium tax credit if you purchase health insurance through the Health Insurance Marketplace.
Why You Might Receive Multiple 1095 Forms
It’s quite possible to receive more than one Form 1095, or even a combination of different types of 1095 forms (like 1095-A, 1095-B, and 1095-C). This usually happens due to changes in your circumstances throughout the year. Here are common reasons for receiving multiple forms:
- Multiple Employers: If you worked for more than one employer during the year, especially if each was an applicable large employer, you might receive a Form 1095-C from each employer.
- Coverage Changes: If you switched health insurance plans or had coverage from different providers within the same year, you could receive multiple forms reflecting each coverage period.
- Family Coverage: Different family members might receive coverage from different sources. For example, you might have employer-sponsored coverage while your children are covered under a Marketplace plan. This can result in different 1095 forms for different family members.
Understanding Different 1095 Forms: A, B, and C
To clarify, let’s briefly distinguish between the different types of Form 1095:
- Form 1095-A (Health Insurance Marketplace Statement): This form comes from the Health Insurance Marketplace (also known as the exchange). It’s for individuals who enrolled in health coverage through the Marketplace. It’s particularly important if you received advance payments of the premium tax credit.
- Form 1095-B (Health Coverage): This form is provided by health insurance providers (like insurance companies) and certain other coverage providers, including small employers who sponsor self-insured health plans. It confirms that you had minimum essential coverage during the year.
- Form 1095-C (Employer-Provided Health Insurance Offer and Coverage): As discussed, this form comes from applicable large employers and details the health coverage offered to employees.
While all these forms relate to health coverage, Form 1095-C specifically focuses on employer-provided offers and coverage.
Examples of Receiving Multiple Forms
Let’s look at a couple of examples to illustrate when you might receive Form 1095-C along with other forms:
Example 1: Marketplace Coverage and Employer Offer
Imagine you’re a single parent with two children. At the start of the year, you were unemployed and enrolled in a health plan through the Marketplace, receiving advance premium tax credits to lower your monthly payments. In August, you started a full-time job at a large company that offers health insurance. Although offered employer coverage, it was deemed unaffordable for you in relation to the premium tax credit, so you continued with your Marketplace plan and advance credits.
In this scenario, you would likely receive Form 1095-A from the Marketplace detailing your coverage and advance premium tax credits. You would also receive Form 1095-C from your new employer, outlining the health coverage they offered.
Example 2: Job Change and Different Coverage Types
Consider you’re single and had employer-sponsored health insurance through a small company (not an applicable large employer) at the beginning of the year. This company purchased insurance from a health insurance issuer. In June, you changed jobs and started working for a large employer (an applicable large employer) that also offered employer-sponsored health insurance purchased from an insurance issuer.
In this case, you might receive two Form 1095-B forms – one from each insurance company related to each employer’s plan. You would also receive Form 1095-C from the large employer, as they are an applicable large employer required to provide this form, detailing the coverage they offered.
What to Do With Form 1095-C
Form 1095-C is primarily for informational purposes. You generally do not need to attach Form 1095-C to your tax return. However, it’s essential to keep this form with your tax records.
Here’s how you might use Form 1095-C:
- Verify Coverage Offer: Review Form 1095-C to understand the health coverage offered by your employer. This information can be important for confirming your eligibility for the premium tax credit if you enrolled in Marketplace coverage.
- Tax Form Preparation (Form 8962): If you received Form 1095-A and advance premium tax credits, you will use information from Form 1095-A and potentially Form 1095-C when completing Form 8962, Premium Tax Credit, to reconcile your credits. In certain situations, Form 1095-C can help verify if employer-offered coverage was considered unaffordable, which could affect your premium tax credit eligibility.
- Record Keeping: Keep Form 1095-C with your other important tax documents for your records. This can be helpful if you have questions about your health coverage or need to refer to it in the future.
Conclusion
Understanding “what is 1095-c” and how it fits into the broader context of healthcare forms is crucial for navigating your tax responsibilities under the ACA. While you may receive multiple forms, each serves a specific purpose. Form 1095-C specifically provides details about employer-sponsored health coverage offers, helping both the IRS and you understand your healthcare landscape for the tax year. Remember to keep all your 1095 forms organized with your tax records for easy access and reference.
