Many taxpayers are receiving a new form in the mail this tax season – Form 1095, either A, B, or C. This is because of the Obamacare law which requires that taxpayers have healthcare coverage. Form 1095 provides documentation of the taxpayer’s coverage by healthcare insurance. Depending upon the type of coverage you have, you will receive a certain type of form. And what should you do with this form?
Form 1095 A
If you have coverage through the Health Insurance Marketplace (established as a result of Obamacare), you’ll receive Form 1095-A. This form is used when you fill out your income tax return for the year, so that your tax credit for the healthcare premium can be reconciled, especially if you received the premium credit in advance.
Form 8962 is filled out and filed with your tax return, using the information in Form 1095 A. If your advance payments are more than what your income supports, you will owe some of these advance payments back – or the amount will reduce your refund. On the other hand, if your advance payments are less than what your income supports or if you didn’t receive advance payments, you’ll get the credit on your tax return.
Form 1095 B
If you had health insurance coverage via a self-insured employer or insurance that you purchased through some other means besides an employer or the Health Insurance Marketplace (including Medicare, Medicaid, or CHIP), you will receive Form 1095 B. This form is used to indicate that you had health insurance coverage as required throughout the tax year.
You (or your tax preparer) will use this form to show whether or not you had insurance coverage in the tax year on Form 8962. If you did not have coverage for any month of the year and you don’t meet one of the exceptions, you will owe the individual shared responsibility payment.
Form 1095 C
If you had health insurance coverage by way of your employer, you will receive Form 1095 C. Just the same as Form 1095 B, this form is used to prepare Form 8962, determining whether or not you had coverage, and subsequently whether or not a shared responsibility payment is due.
If you haven’t received a Form 1095 and you’re expecting one, you should wait until you receive it before filing your tax return. In a practical sense, as long as you definitely had coverage (Medicare, employer benefits, etc.) for the entire year, you can probably go ahead and file without receiving the form, but if you receive a form later and it indicates that you didn’t have coverage, you’ll need to file an amended return to correct the issue.