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- The Forms 1095-A, B and C show proof of essential health insurance coverage but only the 1095-A needs to be included when filing your tax return
- There are stiff financial penalties for not getting and maintaining health insurance coverage
- Contact your employer, insurer or marketplace if your document seems to be late
- In most instances, you can gather the forms electronically and file your taxes electronically
Providing the necessary proof that you have maintained minimal essential coverage medical insurance will keep you from paying the penalties.
You can look forward to emails or paper documents that come in the mail and read “important tax documents.”
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How can I prove minimum essential coverage?
Minimum essential coverage (MEC) for medical insurance is required of everyone that does not meet the qualifications for exemption in the United States.
If you have only recently gained this coverage, you might be wondering how you can prove to the US government, specifically the IRS, that you have what the new health reform laws require.
Much like a W-2 that you receive from your employer for tax purposes, the issuer of your policy will get the needed paperwork to you that documents your coverage, the length of time covered and that it meets at least minimal standards.
You can find out more about the what the ACA considers Minimal Essential Coverage here.
Financial Penalties for Uninsured and Underinsured
Most Americans are looking for an affordable health insurance plan to avoid paying any financial penalty for remaining uninsured.
What some people fail to realize is that the penalty will be just as stiff for not having the right insurance.
There is zero difference in the monetary penalty amount from having a health insurance policy that does not meet the minimum essential coverage and not having a medical insurance policy at all.
The penalty is 2.5 percent of your annual income with a maximum of the cost of a Bronze plan on the marketplace OR $695.00 per adult, $347.50 per child with a maximum amount of $2,085.
You will have to pay the highest of the two fines. There are a few exemptions, such as losing a job and you can find out more about that here.
Tax Forms for Health Insurance
– 1095-A Form
This is a form you will receive if you have, or had a Marketplace plan the previous year. This has all of the information you need to verify how much you pay, the coverage type and how many in your household have coverage.
The IRS will know if this is a policy that meets the criteria of Minimum Essential Coverage. You need to check the form and make sure everything from name, address, premium amount and coverage is correct.
You need to have an honest and accurate form to send in with your tax papers. You will also need a correct second lowest-cost Silver plan amount to both reconcile your coverage and to fill out the necessary form for the tax credit if eligible.
Wait for the 1095-A form before filing taxes. It is mandatory to include when you file for taxes.
– 1095-B Form
The 1095-B will be prepared and either sent to you via mail or offered in an electronic format by an insurer, or small employer. Once again, check to make sure that all of the information is correct and place it with your important tax papers at home.
You do not need this form to file taxes. You will have to tick the box that lets the IRS know you had qualifying health insurance for the year.
– 1095-C Form
Being a member of employer-sponsored group health insurance coverage means you will be getting the 1095-C form for your tax records. It will have all of the pertinent information about your coverage, amount paid and who in your household has benefits.
This is also a paper that does not need to be included with your tax form. Keep a copy of it with your records at home in case there are ever any discrepancies.
What if you do not receive the form in time to file taxes?
You must have the form 1095-A to place with your tax paperwork when filing as proof that you had a marketplace medical insurance policy. They are generally all sent out by no later than the end of February.
You need to contact the Marketplace help center if you have not received this document by then. While the two forms above are not required to file taxes, the information that they request is important to have.
You should keep all relevant health insurance documents in a safe area that’s easy to access and update at least once a year.
Will the forms be mailed or sent electronically?
You might have the opportunity to have the forms mailed or to download digital copies. It depends on the company and insurers. Filing the tax document and form can be done by mail, or electronically when done as an individual.
Electronic filing tends to speed the process up and the IRS encourages this route.
Where do I send the form?
The Marketplace will most likely offer you the opportunity to download your 1095-A in a PDF form for electronic tax filing. If you get it in the mail, attach it to your tax return as proof of a Marketplace plan.
You can put the two other 1095 tax forms with your personal tax documents; the IRS does not require them. All they need is your verification of having essential coverage by ticking the box on the tax return.
ACA health reform has made it easy to bring together all of the information you need to prove you are in compliance with coverage, without having to jump through complicated hoops and procedures.
Contact a tax and health insurance expert today if you have any questions about the forms needed to file your taxes without problems.
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