The Form 1095-C is a legal tax filing form that is employed in the United States to report the employer-related health insurance coverage. It is under the Affordable Care Act (ACA), reporting provisions, and is involved in assisting individuals and the Internal Revenue Service (IRS) to monitor the presence of health coverage by employers and the access of employees and their dependents to the coverage. This form is informative, though not enough to get your refund of tax or tax payable, it is just that it is in a form which is consistent with the requirements of having health insurance.
What Is The Form 1095-C?
Applicable large employers (ALEs) are the issuers of the 1095-C Form, which is entitled Employer-Provided Health Insurance Offer and Coverage, usually, those with 50 or more full-time employees (including full-time equivalents).
The reason of the form is to report:
Were you provided with health insurance by the employer?
MI What months of the year that it was covered.
Whether or not you have signed up for the coverage.
It assists in recording adherence to the employer shared responsibility of the Affordable Care Act (ACA).
Notably, you should not include this form on your tax return, though this should be stored together with your tax records.
Who Receives Form 1095-C?
Form 1095-C should be received in case all the following are applicable:
You had a 50 or above fulltime employer (ALE status).
You worked at least one month of the year and were a full time employee.
In the year, your employer was providing you with health coverage.
The 1095-C can be received even when you refused to have coverage, or only worked half of the year, as long as the employer maintained records of you as a full-time employee.
Employees who are not otherwise covered by the definition of the term ALE are generally not provided with this variation directly by their employer, though one with other coverage (1095-B) may be provided.
Why The 1095-C Form Matters
Though the individual mandate penalty on lack of coverage in the ACA was lowered to 0 at the federal level beginning in 2019, the 1095-C is significant in that:
It records whether an employer made you an affordable cover.
It can be applied by the IRS to check the compliance of the employers with the rules of ACA.
It assists you in its verification of your health coverage.
It assist you in your tax filing in the event that you intend to claim exemptions or reconcile premium tax credits.
Even in those states that have their own separate mandate (identified as individual mandates), you may be subject to inclusion of proof of coverage (usually a form such as the 1095-C) on your state tax return.
What Data Is Included On Form 1095-C?
The shape has a number of notable sections:
1. Employer Information
Employer name
Identification number of the employer (EIN).
Employer address
2. Employee Information
Employee name
Social Security (masked partially) number.
Employee address
3. Offer and Coverage Details
This section includes:
Months coverage was offered
Whether you, your spouse, and /or dependents had coverage.
Codes of the type of coverage that was provided.
These codes assist to determine whether the offer was found to be compliant on the terms of ACA.
4. Safe Harbor Codes
These show whether the offer was structured in a manner that it was affordable.
This knowledge will ensure that you confirm the fact that your employer was reporting according to the ACA requirements.
How To Read Key Boxes On The 1095-C
It becomes more helpful with learning to interpret key boxes on the form:
Offer of Coverage Codes
These are codes that indicate what type of health plan was being offered:
Code 1A -Minimum essential coverage with minimum value that is offered to the employee.
Code 1E -Predstreje plagerosi ex classes nidius, et nidius coverage provides to employee and spouse and dependents.
There are other codes that indicate various scales of offer or lacks offer.
The code allows you to view whether or not that the coverage was deemed sufficient and affordable.
Employee Offer Of Coverage
There are also other boxes that denote the months the offer was in effect.
Safe Harbor Codes
Safe harbor designations indicate whether there was affordability with respect to the coverage as per:
- W-2 wages
- Rate of pay
- Federal poverty line
- Other safe harbor measures
This is because such codes assist people in establishing whether their offer was affordable.
When Do You Receive The 1095-C Form?
Employers are required to furnish to the employees who are eligible with the 1095-C form normally before January 31st of the year after the coverage year ends. This will be the time when people will be provided with the documentation that they require prior to filing their tax returns. In case you do not get your form in the middle of February, then you can address the HR or benefits department of your employer.
Keep in mind:
Employers could present the form electronically (with permission).
In the case of the changes that are required, some employees are provided with corrected forms after being initially issued.
Is 1095-C Filed With Your Tax Return?
No. The 1095-C form is not attached to your forbearing federal tax-return.
Instead:
- Keep it with your tax records.
- It is to be used to determine the coverage offered.
See it when filing your return in case you are confused over whether you were covered or not.
The tax computer program might request that you have gotten a 1095-C file and you might include data gathered in it, however, this is usually non obligatory in case you have documented some other insurance cover.
How To Cross The Line In Case Of The Form Being Incorrect Or Missing?
Can you get false information or fail to get a form you think you will:
- Call the HR or benefits department of your employer.
- Request an amended copy in the event of necessity.
In your part, make sure the name and the Social Security number were typed in correctly.
Record your communication so that you can refer to it later.
Although you may not get a 1095-C, you must provide the correct information regarding your coverage, when requested, on your tax filing.
How 1095-C Affects State Taxes
A number of states (such as California, Massachusetts, New Jersey, Rhode Island and Vermont) have their personal health insurance requirement. In such states, your proof of continuous coverage may require Form 1095-C or some variation of it. Your state tax return may ask:
- Did you have health coverage?
- Was coverage offered?
- Were you exempt?
Under that scenario, the 1095-C will be in a position to assist in meeting state reporting.
Some of the common scenarios involving 1095 -C.
Scenario 1: You turn down the offer of coverage by the employer.
It is possible that you can still get the 1095-C where it is indicated that coverage was offered, even though you did not enroll.
Background Only: Dependents Covered.
In case your employer provided dependent coverage but you fail to cover them, the information is recorded on the form anyway.
Part-Year Employment (Scenario 3).
When you worked the part of the year, the form can reflect the offers on the months that you worked.
FAQs About 1095-C Form
1. The intention of 1095-C form?
It also provides reports to verify the compliance with the Affordable Care Act by reporting the employer-based health insurance provision and coverage.
2. Who must receive a 1095-C form?
This covers employees of applicable large employers (those generally with 50 or more full-time employees) who were provided with a health coverage at any point of the year.
3. Are You Some of the 1095-C that I am required to attach to my tax return?
No — you are supposed to have it in your books, but it is not normally appended to your federal tax filing.
4. What will happen when the details on the form are incorrect?
Address your employer to send him a corrected copy. Some of the common errors are concerning Social Security numbers or coverage months.
5. Saying, can the form have any impact on my tax refund?
It generally has no direct impact on your refund, however, it can be used to confirm your status on the health coverage, particularly those requiring individual mandates.
Conclusion
The 1095-C form is important to record the information about the availability of health coverage by an employer and the manner in which the coverage was provided during the year. It does not directly confirm your tax refund not payment directly, however, it is significant evidence of health insurance plans on the Affordable Care Act in supporting federal compliance, and in various states, state individual mandate needs.
It is necessary to understand how to read the form to confirm:
- What your employer offered.
- What months of coverage was available.
- Meeting the affordability criteria in terms of coverage.
It is beneficial to keep and audit your 1095-C annually so that you can keep informed of your history of health coverage and prevent possible difficulties when executing your annual tax filings.
