Form 1095-B vs. 1095-C: Key Differences and Similarities Explained

Under the Affordable Care Act, insurers, employers, and government entities are required to ensure Americans have access to Minimum Essential Coverage (MEC).

To verify compliance with ACA requirements, the Internal Revenue Service (IRS) introduced a series of 1095 forms, including Forms 1095-B and 1095-C.

While both are key reporting documents under the ACA, each serves a different purpose and affects different groups. Understanding which form applies to you can help avoid costly compliance issues.

Learn more about the key differences and similarities between these two forms: 1095-B and 1095-C.

TL;DR - 1095-B vs. 1095-C

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Here’s a quick side-by-side comparison of Form 1095-B vs. 1095-C, highlighting the pros and cons for each form:

Form 1095-B	Form 1095-C
Provides proof to the IRS that an individual (with non-Marketplace coverage), along with their covered dependents, had minimum essential coverage through a health insurance company, small self-insured employer, or government agency (that is, Medicaid, Medicare, or Children’s Health Insurance Program).	Provides proof to the IRS that the Applicable Large Employer (ALE) offered minimum essential coverage to their full-time employees.
Pros	Pros
Shows who had health coverage, including the months they were covered. Documents coverage information for the individual covered and their dependents. Acts as proof that the individual covered had qualifying coverage.	Gives a clear record of whether and when health coverage was offered. Serves as proof of the ACA employer mandate, helping avoid penalties under section 4980H of the Internal Revenue Code (IRC). Serves as a reference to employers’ decisions surrounding employee eligibility.
Cons	Cons
Attracts penalties for late submission or errors. Filing burden due to differences between federal and state requirements regarding the individual mandates.	Complex to prepare- requires information tracking, coding, and must meet strict deadlines. Missed deadlines or errors can lead to penalties.
Best For	Best For
Health coverage providers include insurance companies, small employers that sponsor self-insured plans, and government agencies that offer minimum essential coverage to individuals.	Large employers subject to the ACA employer mandate offering MEC to full-time employees.

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What is Form 1095-B?

Form 1095-B is a health coverage return that reports details of individuals (Not from ALEs) to whom they offered minimum essential coverage the previous year.

It documents the healthcare coverage provider, covered individuals, the type of coverage provided (excluding Marketplace coverage), and the months covered.

The form is usually issued by health insurance providers, who include:

Small self-insured employers
Private health insurance providers (excluding Marketplaces)
Government agencies like Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).

Purpose of Form 1095-B

The 1095-B form serves three purposes under the Affordable Care Act:

It helps the IRS verify that the covered individual (a taxpayer) and their dependents received minimum essential coverage during the year.
It serves as a reference for covered individuals and may be used to verify information in the event of IRS inquiries.
It serves as proof of compliance to the insurers and government agencies.

Form 1095-B Issuance and Access for Employers

If you’re an employer sponsoring a self -insured plan, you have to file this form with the IRS by the latest 28th February (for paper filing) or 31st March if filing electronically, unless advised otherwise by the IRS. You should furnish your employees with copies by 2nd March.

If you are unable to meet the required deadlines, you may request an extension by submitting Form 8809. The IRS will review your request, and if approved, you will have 30 additional days to file your reports.

Note: This extension does not apply to the deadline set for furnishing copies to employees.

Do Employers Need to Provide Form 1095-B for Tax Filing?

While it’s a requirement to distribute Form 1095-B to your covered employees, they do not need it to file their returns. Besides, the federal individual mandate was reduced to zero.

The form may be helpful for individuals in states with an individual mandate who need to verify their coverage details.

Form 1095-B is more of a reporting obligation, not a tax filing document for your employees.

Types of Coverage Reported on Form 1095-B

Form 1095-B reports several categories of Minimum Essential Coverage (MEC). Note that the form maintains a standard structure regardless of the coverage being reported.

The single-letter code in Part 1, line 8, varies by coverage type.

Some of the common coverages reported include:

Employer-Sponsored Coverage (Self-Insured)

This refers to self-insured medical plan benefits for employers with fewer than 50 full-time employees.

The employer reports your coverage to the IRS by using code ‘B’ on line 8.

Government-Sponsored Programs

These are coverage options available through government programs, including Medicare, Medicaid, and CHIP.

The specific government agency sponsoring the program is responsible for filing Form 1095-B for coverage under those programs, using code “C” on line 8.

Individual Market Health Plan

This refers to minimum essential coverage (MEC) purchased directly by individuals from an insurance company, not through a Marketplace, and usually reported using code ‘D’ on line 8.

What is Form 1095-C?

It is an IRS tax form that documents health insurance coverage offered to full-time employees for one or more months of the calendar year.

It usually details the employer and employee’s information, coverage offered, the cost, and the period it was offered.

ALEs are responsible for filing this form with the IRS by 31st March each year and distributing copies to their employees by January 31st. If your company is obliged to file this form, it means you have 50 or more employees.

Purpose of Form 1095-C

The key purposes of Form 1095-C include:

Helping the IRS confirm whether the ALE is compliant with the requirements of the employer shared responsibility provision of the ACA or is liable for a penalty. Basically, ALEs are required to offer their full-time employees minimum essential coverage that is affordable and provides minimum value.
Determining an employee’s eligibility for the premium tax credit (PTC). A full-time employee can claim PTC if the ALE failed to offer coverage or the coverage offered was not affordable or didn’t meet the minimum value.
As a defense document for the ALE and the employee in an event, they must explain the coverage gap to the IRS.

Are Employers Required to File Form 1095-C?

No, you don’t need your Form 1095-C to file your taxes unless there is information that you must verify before filing your returns.

However, you can keep it with your other documents; it might be useful later.

How Employers Can Access and Manage Form 1095-C Online

Nowadays, most coverage providers and employers share Form 1095-C online through:

Benefits portals
The company’s payroll systems
Third-party portals- for those who have outsourced the services to providers like ADP.

That said, to access the information:

Visit your employer’s company portals or a third-party portal.
Log in using your credentials.
Navigate to the tax documents and search for your form.
Download your copy.

Alternatively, if you had consented to receiving your form via email, request that HR send it to you there.

Electronic Filing Requirements for Form 1095-C

According to the ACA, when filing Forms 1095-C forms (more than 10 returns), you must file electronically. You can either file directly through the ACA’s Information Return System or an authorized E-file provider.

Here are simple steps to follow:

Filing Directly Through the IRS AIR System

This is for employers required to file 10 or more forms:

Compile all the information about your employees’ health coverage required to complete the form, including employee and employer details for the coverage and the codes for lines 14 & 16.
Register for an IRS e-service account and apply for a Transmitter Control Code (TCC).
Once you receive the TCC, use the data compiled earlier to generate your 1095-C forms in XLM format.
Go to the IRS AIR testing system and upload that file as your test file (Using the 1099, etc. program)
Once the file is approved, log in to the AIR system and upload your final files.
Keep a record of the receipt ID (the ID that appears after the transmission is confirmed).
Use the receipt ID to check the status of your files.
Fix any errors in your files and resubmit them.

Filling Using an Authorized Provider

Here are the steps to file your Form 1095-C using this option:

Create an account on their platform.
Upload your employees’ data in CSV or Excel format, or directly from your HR system.
The third-party software will automatically generate your forms in the required 1095-C format.
Review the files for accuracy (correct any errors).
Pay the service fee charged.
Submit your forms.

Relevant Characteristics Between Form 1095-B and 1095-C

Check out how the Form 1095-B and 1095-C compare against some of the main characteristics:

	Form 1095-B	Form 1095-C
Issued By	Health Insurance providers, government programs, and small employers (with less than 50 employees)	Large Employers (with 50+ full-time employees)
Applies To	Individuals covered under Minimum Essential Coverage (MEC) during the calendar year	ALEs’ full-time employees under Minimum Essential Coverage during the calendar year
Primary Focus	Coverage (if you get the form, it shows you were covered	Offer (if you get the form, it means an offer was provided)
Reporting Deadlines	January 31st – to furnish the policyholder To the IRS Paper filing by February 28th Electronically filing by March 31st	Share with the employee by January 31st File with IRS by February 28th (Paper filing:) and By March 31st (Electronically filing:)
Filing Requirements	Details for the policy holder Details for all individuals covered under the plan Details for the coverage provider	Information about the employee and the employer Insurance company details Employees under the plan Employee required contribution

Similarities and Differences

Let’s highlight some key differences and similarities between these two forms.

Form 1095-B and 1095-C Differences

First, let’s outline how the Form 1095-B and 1095-C differ:

Main Objective under IRS: Form 1095-B is intended to confirm that individuals and their dependents were covered under MEC, as required by the ACA. In contrast, Form 1095-C is used to confirm that the employer (ALE) provided employees and their dependents with qualifying coverage as required under the ACA.
Premium Tax Credit Eligibility: Form 1095-B does not report employees’ contributions, which limits individuals’ ability to claim premium tax credits, especially for employees of small employers. On the other hand, Form 1095, line 15, captures employees’ contributions, making it easy to verify their premium tax credit claims.
Form Recipient: Form 1095-B goes to everyone who had MEC coverage through an insurance company, government program, or small employer, regardless of their employment status. Form 1095-C is only distributed to full-time employees who had MEC coverage through an Applicable Large Employer (ALE).

Form 1095-B and 1095-C Similarities

Let’s now explore how the two forms are similar:

ACA Reporting Requirements: Both forms serve as IRS tax reporting documents and provide details on health insurance coverage, specifically the minimum essential coverage offered to covered persons and their dependents during the tax year.
Tax Filing: The forms are not required for filing tax returns. That means you do not need to attach them to your tax files or wait for them to complete your filing process.
Filing and Distribution Timelines: Both of these forms must be filed before 31st March if you choose to transmit electronically and by 28th February if you choose paper filing. Also, both must be shared with the recipients by the 31st of January each year.

The Bottom Line

Understanding the differences between Forms 1095-B and 1095-C is crucial, whether you’re an employer or an insurance coverage provider.

It ensures that your reports are not only accurate but also compliant with the Affordable Care Act. If you receive any of these forms, take your time to identify the right one for you, based on the type of your business, number of employees, and type of coverage.

You can consider seeking professional help that goes beyond compliance.

At Ethos Benefits, we provide fiduciary-driven benefits consulting services to reduce your administration burden, provide compliance oversight, and manage employee communications.

Schedule a discovery call today and get expert consultation on your employee plans to avoid last-minute rushes on all your documentation.

Frequently Asked Questions (FAQs)

Below are responses to questions commonly asked about these forms:

Can I Get My 1095-B Online?

Yes, you can get your Form 1095-B online. Visit your insurance company’s website and log in to your account, then navigate to tax documents. You’ll be able to view or download your file.

If a government program covers you, contact the relevant service and request the form.

Can I Receive Both 1095-B and 1095-C Forms?

The entity that files Form 1095-B is responsible for correcting errors, whether it is your government agency, insurance carrier, or employer.

Who is Responsible for Correcting Errors on 1095-B?