Form 1095-C: Employer-Provided Health Insurance Offer and Coverage

First, let’s define what it is: Form 1095-C, titled Employer-Provided Health Insurance Offer and Coverage, is a statement of health coverage offered to eligible employees.

What Is Form 1095-C?

According to the IRS, Form 1095-C is filed and furnished to any employee of an Applicable Large Employer (ALE) member, who is a full-time employee for one or more months of the calendar. ALE members must report that information for all 12 months of the calendar year for each employee. We’ll go into more detail about ALEs below.

Who needs to file IRS form 1095-C?

A little bit of background: The health care law defines which employers must offer health insurance to their workers. These are the ALEs we touched upon above.

With that, a company or organization is an ALE if it has at least 50 full-time workers or full-time equivalents. A full-time worker, according to the law, is someone who works at least 30 hours a week.

A full-time equivalent, meanwhile, is two or more part-time employees whose hours add up to a full-time load. Two workers who each put in 15 hours a week, for example, would make up one full-time equivalent (15 x 2 = 30 = 1 FTE). It’s important to note that only ALEs are required to file Form 1095-C.

Why did I receive a 1095-C?

If you work full-time for a qualifying large employer, they will send Form 1095-C to you around January each year. Again, you don’t need to attach this form to your individual tax return, but you always want to make sure you keep it for your records.

It’s interesting to note that it used to be more important before 2019, as there was a penalty associated with not having health care coverage. This is no longer a requirement, but you’ll still want to keep any tax forms you receive in your records and make sure to bring them to your tax professional when it comes time to file your taxes.

What to do if you received a 1095-C form?

If you receive a 1095-C form, you’ll want to retain it in your records and bring it to your tax appointment when it comes time to file your taxes.

Breaking down the sections of form 1095-C

Form 1095-C has several parts.

• Part One of the form has information about the employer, including their contact information, in case the IRS has any questions about the form or sees a mistake.
• Part Two has information about the employee’s health care coverage. It states information about the plan and reports required employee contributions.
• Part III is filled out only if the employer provides a self-insured plan. This section lists the names of the covered employees, along with their corresponding Social Security numbers and dates of birth. Part III also validates uncovered months for the employees, if applicable.

IRS Form 1095-A vs. Form 1095-B vs. Form 1095-C

People often wonder what the differences are between Form 1095-A, Form 1095-B and Form 1095-C. We’ll go through the high-level distinctions below.

Broadly speaking:

• You’ll receive Form 1095-A if you purchased insurance through the Health Insurance Marketplace.
• Forms 1095-B and 1095-C are for informational purposes only and don’t need to be reported on personal income tax returns.
• It’s possible to receive multiple forms (A, B, and C) in a year if you have different types of health insurance coverage.

How is Form 1095-A different?

We’ll delve a little deeper into Form 1095-A, in case you’re also receiving this one.

First, let’s talk about the Premium Tax Credit (PTC). That’s the money you get if you purchased health insurance through the Healthcare Marketplace. Based on your household size and income, you may also get an advance on this credit, called the Advanced Premium Tax Credit (APTC).

The purpose Form 1095-A is to provide information about how long you’ve been covered by the health plan, and how much of the APTC you received to assist you in paying the premium.

• APTC is an advance of the PTC used to lower your out-of-pocket monthly health insurance payments, or “premiums.”
• If you didn’t use all your APTC, you’ll get the rest as part of your refund.
• If your APTC is more than the actual premium you paid for your insurance, you’ll need to pay the balance. It can come out of your refund, or you’ll need to pay the IRS.

The amount of APTC is based on the household size and income and is paid directly to the insurance provider by the marketplace.

Form 1095-A reconciles the APTC you received with the actual PTC amount you are eligible for that year. If your APTC is more than the actual premium you paid for your insurance, you’ll need to pay tax on the balance. It can come out of your refund, or you’ll need to pay the IRS.

Additionally, if you are self-employed, you use the premium you paid, found on your Form 1095-A to determine your self-employed health insurance deduction or itemized medical deductions on Schedule A of your tax return.

How do I calculate my PTC?

You need Form 1095-A to calculate the actual amount of your PTC, and you’ll do this by completing Form 8962 Premium Tax Credit with that information. The IRS verifies the information on your Form 8962 by comparing it to information received from the marketplace, and to other information you entered on your tax return.

• The PTC is a refundable credit that helps eligible individuals and families cover the premiums for health insurance bought through the Health Insurance Marketplace. That means you’ll get the full amount, even if it’s more than you’ve received for your APTC.

You won’t need to send your 1095-A in along with your completed tax return. If the IRS finds any errors in your return, it may send you a separate notice after you’ve filed, asking for more information, such as a copy of your Form 1095-A.

As we conclude, we’ll point out that all these tax forms are primarily for your records. These will help you and your local Tax Pro accurately file your taxes. If the IRS eventually requests a review of your 1095-A, be sure to make a copy to send back, and keep the original for your records. Find a Tax Pro near you today to help with all tax questions you may have year-round.

About the Author

Mark Steber is Senior Vice President and Chief Tax Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

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