Understanding 1095-C: The Health Insurance Reporting Form

What is tax form 1095-C? This article provides a comprehensive guide to the 1095-C form, a document used in the United States to report health insurance coverage offered by applicable large employers (ALEs) to their employees. We will explore the details of this form and its significance in the Affordable Care Act (ACA).

Introduction to Tax Form 1095-C

Form 1095-C, also known as the Employer Information Return, is a critical document in the ACA provisions. Its primary purpose is to report information about health insurance coverage provided by applicable large employers to their employees. This guide will help you understand what this form entails and its importance in tax reporting.

Who Receives It?

Employees of applicable large employers (ALEs) with 50 or more full-time employees typically receive this form. If you work for an ALE and were offered health insurance during the year, you are likely to receive this form. It is used to inform employees about the health coverage they received through their employer.

Employer Details

Name: The name of the employer Address: The physical address of the employer Employer Identification Number (EIN): The unique identifier assigned to the employer by the IRS

Employee Information

Name: The full name of the employee Address: The address of the employee Social Security Number: The unique identifier assigned to the employee by the Social Security Administration (SSA)

Information Included on Form 1095-C

Form 1095-C includes detailed information about the health insurance coverage offered, including:

The type of coverage offered (e.g., health insurance plan) Whether the coverage met the minimum essential coverage standards Whether the coverage was deemed affordable (costing less than 9.86% of the employee's household income)

Purpose of Form 1095-C

To provide information to employees about the health coverage they were offered, aiding them in making informed decisions about their insurance plans. To assist the IRS in enforcing the individual mandate and employer mandate provisions of the ACA, ensuring compliance with ACA requirements.

Filing Requirements for Form 1095-C

Employers must file Form 1095-C with the IRS and provide a copy to each full-time employee by January 31 of the following year. This ensures that employees have access to the information about their health insurance coverage for that calendar year.

Impact on Taxes

While individuals do not need to attach Form 1095-C to their tax returns, they may need it to help complete certain tax filings, particularly:

If you purchased insurance through the Health Insurance Marketplace and want to claim the premium tax credit. To determine eligibility for certain tax credits or benefits.

For Information Purposes Only

It is important to note that 1095-C is a 'For Information Purposes Only' form. While it can be useful for tax planning and record-keeping, it is not required for filing income taxes. Employees can either keep it with their tax paperwork or throw it away, depending on their needs.

Conclusion

In summary, 1095-C plays a crucial role in the ACA reporting requirements, ensuring that employers provide necessary health coverage information to their employees. Understanding this form and its purpose can help both employees and employers navigate the complexities of health insurance coverage under the ACA.