The Affordable Health Care Act, also known as Obamacare, introduced three new tax forms relevant to individuals, employers and health insurance providers. They are forms 1095-A, 1095-B and 1095-C. These forms help determine if you need to comply with the new shared responsibility payment, the fee you might have to pay if you don't have health insurance. For individuals who bought insurance through the health care marketplace, this information will help to determine whether you are able to receive an additional premium tax credit or have to pay some back.
Shared Responsibility Payment
Any gap in qualifying insurance coverage of three months or more for you or your dependents can require you to pay an individual shared responsibility payment. This information is reported on your income tax return and is obtained from the information you provide and that provided on 1095 forms. You may be exempt from this payment if, for example:
• Affordable coverage options are not offered by your employer
• The gap in insurance coverage is three or fewer consecutive months
• You belong to a group that is explicitly exempt from participating in the Affordable Care Act by the Internal Revenue Service (IRS)
Insurance companies participating in health care exchanges should provide you with the 1095-A form, a health insurance marketplace statement. This form includes:
• Your name
• The amount of coverage you have
• Any tax credits you were entitled to
• If you used them to pay for your health insurance and the amount you paid for coverage
You use this information to complete your income tax filing, adjust any tax credit payments and claim any premium tax credits that may be due.
Employers with fewer than 50 full-time employees that offer health coverage, as well as health care insurance providers, send the 1095-B form to members of their health insurance plans, as of the 2015 tax year. This form includes:
• The type of coverage you have
• Your dependents covered
• The period of the coverage
This form is used to verify on your tax return that you and your dependents have at least Minimum Essential Coverage (MEC). If you had a break in health care coverage for the tax year, you may have to pay an individual shared responsibility payment.
Form 1095-C, employer-provided health insurance offer and coverage, shows the coverage that is offered to you by your employer, as of the 2015 tax year. It is used by larger companies with 50 or more full-time or full-time equivalent employees. This form provides information of the coverage your employer offered and whether or not you chose to participate. You can use this to complete your tax return.
Penalties for 2015
Unless an individual qualifies for an exception, the monthly penalty is the greater of the following.
1. $325 per adult (up from $95 in 2014) plus $162.50 per child under age 18 (up from $47.50 in 2014), with a maximum penalty per family of $975 (up from $285 in 2014)
2. 2% (up from 1% in 2014) of the household’s annual income above the tax filing threshold (The maximum penalty is the national average premium for a Bronze-level plan.)