What is Form 1095-B?
Let’s dive into the nitty-gritty of Form 1095-B. Think of it as a receipt, but for your health insurance. It’s not something you file with your tax return (generally, anymore), but you need it for your records. It confirms that you (and potentially your family members) had health coverage, which helps the IRS know that you met a main requirement under the Affordable Care Act (ACA) – although penalties for not having coverage have been eliminated at the federal level.
H3: The Background of Form 1095-B: Why Does It Exist?
The form came about as part of the Affordable Care Act (ACA), also sometimes called Obamacare. This law wanted to make sure more people had health insurance. One of its original core ideas was the “individual mandate”, which required most people to have health insurance or pay a penalty. Form 1095-B was created to prove you had coverage so you wouldn’t get charged a penalty.
H4: The Individual Mandate and the Penalty (Past and Present)
Originally, if you didn’t have health insurance that met the ACA requirements, you might have had to pay a penalty (called a Shared Responsibility Payment) when you filed your taxes. Form 1095-B helped the IRS know if you had coverage or should be assessed this penalty. However, this federal penalty was eliminated starting in 2019.
It is important to note that some states, like Massachusetts, New Jersey, California, Rhode Island, and Vermont, have implemented their own individual mandates and may assess a penalty at the state level for not having qualifying health insurance coverage. So, while it’s not an issue for the federal return in most cases anymore, it still may be relevant to you depending on the state you live in.
H4: The Continuing Importance of Form 1095-B
While the federal penalty is gone, the form is still around to provide a record of the health coverage. It can help you avoid issues down the line, prove your coverage in case of errors, and ensure accurate record keeping. Some states may still require it in connection with their own individual mandate.
H3: How Does Form 1095-B Work?
Form 1095-B is usually sent to you by your health insurance provider, an employer-sponsored health plan, or the Health Insurance Marketplace where you bought your plan. It should arrive by mail or via electronic delivery in early spring for the prior tax year. The form looks somewhat like other tax forms you might get.
H4: What Information Is on Form 1095-B?
The form will have the following details:
- Your Information: Your name, address, and Social Security Number (or other Taxpayer Identification Number).
- Your Family’s Information: If your insurance covers others, the same information will be listed for each of them.
- Your Health Insurance Provider Information: The name, address, and Employer Identification Number of the company or organization providing your health insurance.
- Coverage Dates: The months during the year that you had coverage. If you weren’t covered for the whole year, this section will note those gaps.
H4: Who Provides Form 1095-B?
- Insurance Companies: If you have a policy directly from an insurance company, they’ll send you the form.
- Employers: If your health insurance comes through your job, your employer (or their third-party administrator) will likely be the sender.
- The Health Insurance Marketplace: If you bought your plan through the marketplace (healthcare.gov or your state’s exchange), the marketplace will issue the form.
H3: Who Needs Form 1095-B?
Almost anyone who has qualifying health coverage should receive a Form 1095-B. This means that you should get one if you had:
- Private health insurance: Purchased directly from an insurance company or through the Marketplace.
- Employer-sponsored health insurance: Coverage provided through your job.
- Government-sponsored programs: Medicare, Medicaid, TRICARE, or VA health care.
- Other qualifying health coverage: This may include certain student health plans or other types of coverage.
If you are covered by a “self-funded” employer health plan, you typically would receive Form 1095-C from your employer rather than Form 1095-B.
H3: What Do You Do with Form 1095-B?
- Keep it for your records: The main use is for your records. Store it with your other important tax documents for safekeeping.
- Use it if needed for state taxes: For taxpayers residing in the states with their own health insurance mandate, they should review their 1095-B and potentially report the information on their state tax returns.
- Use it to verify your coverage: Review it to make sure all the details are correct, such as the coverage dates, your name, your family’s names, and the insurance provider’s information. If something is wrong, contact the provider that sent the form and ask for a correction.
- Use it to help reconcile Advanced Premium Tax Credits: If you received Advanced Premium Tax Credits when you bought your plan through the marketplace, you would likely have received a Form 1095-A instead of Form 1095-B. You’d use Form 1095-A to reconcile your credits at tax time on Form 8962. However, Form 1095-B could still be useful if you had other coverage for parts of the year.
- No need to file it with your federal return: You generally do not need to submit Form 1095-B with your federal tax return (unless specifically told otherwise by a tax professional). You just need to keep it for your records.
H3: Common Mistakes and Misconceptions about Form 1095-B
- Thinking it’s used for filing: One common misconception is that you need to include Form 1095-B when filing your federal income tax return. You do not. It’s solely for your records and for potential use for state income tax returns.
- Ignoring the Form: Some people might toss the form away because they believe it’s unimportant. However, keeping it can help with proving your health insurance coverage.
- Assuming it covers the whole year: Be sure to review the coverage dates and don’t assume it covers the entire year. If you changed policies during the year, you may receive multiple forms. If you didn’t have health insurance for part of the year you may receive no form at all.
- Confusing it with Form 1095-A: If you got your health insurance from the marketplace, you’re likely to receive Form 1095-A, which includes important information for calculating your Premium Tax Credit. Form 1095-B will be issued by other providers who do not issue Form 1095-A. Both are important.
H3: Related Terms
- Form 1095-A: A form provided by the Health Insurance Marketplace if you purchased coverage there, and it’s used for reconciling premium tax credits.
- Form 1095-C: A form usually issued by larger employers confirming they offered health coverage to full-time employees.
- Affordable Care Act (ACA): The healthcare law that introduced these forms.
- Health Insurance Marketplace: The online marketplaces where you can purchase individual health insurance plans.
- Premium Tax Credit (PTC): A tax credit that helps eligible individuals and families pay for health insurance purchased through the marketplace.
- Individual Mandate: The ACA requirement that most people have health insurance, although the federal penalty has been eliminated.
H3: Tips for Handling Form 1095-B
- Store it safely: Keep it with your other important tax documents.
- Review it carefully: Look for errors and correct any mistakes right away.
- Contact your provider: Reach out if you have any questions about the information on your form.
- Seek professional help: If you’re not sure what to do, consult with a tax professional or accountant.
Form 1095-B might seem like just another tax document, but understanding its purpose is key. Keep it organized, and don’t be afraid to reach out for help if you need it!