Q: I overheard someone at work talking about a new form we’re supposed to receive before we do our taxes this year. It sounds like in addition to the usual W-2 from my employer and a 1099 for my freelance jobs, I’m supposed to also be getting one additional form that shows I had health insurance during 2015? What is that, who sends it and what do I do with it?
A: Your co-worker was referring to Form 1095 which was created by the IRS to meet the requirements of the Affordable Care Act (ACA).
First, let’s review.
ACA (aka Obamacare), requires all Americans to have a basic level of health insurance. Those who don’t have such insurance may be required to pay a fine. The easiest way to think of Form 1095 is as your “proof of insurance. This form clears you when you file your taxes, so you are spared that pesky fine.
As mentioned, the IRS created Form 1095 but -because nothing is ever simple if the IRS is involved- they also created an additional three versions of the form: versions A, B and C. Which form you receive depends on who insured you and who’s sending you the form.
1095-A forms originate from the “marketplace” (i.e. healthcare.gov). You’ll get one of these if you’re self-employed or decided to buy insurance on your own in the marketplace, with or without a subsidy.
1095-B forms originate from the insurance company that provided you coverage (they could also originate from a self-insured small employer, but that’s rare).
1095-C forms originate from your large employer (50 or more employees).
Keep in mind that 1095 forms are filed by whomever provided you coverage, so as an individual you won’t have to fill these out yourself (relief!), they will be pre-populated. You should receive a 1095 from one of these three sources (unless you had zero insurance in 2015) and they’ll send a copy to the IRS as well. It’s possible but unlikely, that you might get more than one form.
Lastly, don’t stress about doing something wrong. This year there seems to be a high tolerance for fudging it. In fact the IRS just extended the due date by which the 1095 form must be sent to employees from February 1 to March 31.
The best, clearest, unbiased information I’ve found about ACA here.
Note: this column is not intended as tax or legal advice.