Form 1095-B is among the documents Americans use in connection with health insurance and taxes. Many of them receive the form by mail or electronically. Still, most are unsure of its purpose, whether they need it to file their tax returns, what to do if they do not receive it, or what to do if they receive it and it contains incorrect information.
In this article, we shall explain what a Form 1095-B is, highlight its differences with Forms 1095-A and 1095-C, explain the information it contains, its purpose, who receives it, how to obtain it, and common misconceptions surrounding it.
Let’s begin!
What is the 1095-B Form?
Form 1095-B is an informational document that reports to the IRS that an individual received minimum essential health care coverage under the Affordable Care Act (ACA).
The IRS requires insurance providers and government programs such as Medicare and Medicaid to issue the document to the agency. Besides, you’re required to show that covered dependents received qualifying health insurance that meets federal requirements for at least one month or more during a specified tax year.
The health coverage reported on Form 1095-B includes:
- Private health insurance purchased from outside the marketplace.
- Self-funded health insurance from small employers.
- Government-sponsored coverage, such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), and TRICARE.
Before 2019, there was a tax penalty for not having a minimum essential health coverage called an individual shared responsibility payment. The penalty was either 2.5% of your household income above the tax filing threshold or a flat fee of $695 per adult or $347.50 per child, with a maximum of $2085, whichever amount was greater.
People with certain hardships or low income could qualify for an exemption from the penalty. If you were uninsured for 3 months or less, you were also exempted from the penalty. However, beginning January 1, 2019, the IRS reduced the penalty for not having minimum coverage to $0.
Keep in mind, Form 1095-B is purely for your record-keeping purposes. It is not a bill or a tax payment form. It is also not a document to file with your tax returns.
1095-A vs. 1095-B vs. 1095-C Form
The IRS uses three different Form 1095s to determine the types of health insurance coverage received by American employees.
The forms are, namely, Forms 1095-A, 1095-B, and 1095-C. It is essential to understand the differences among the three forms so you can determine which applies to your situation.
Below is a brief distinction between the three:
| Form 1095-A (Health Insurance Marketplace Statement) | Form 1095-B (Health Coverage) | Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) | |
|---|---|---|---|
| Issuer | Health insurance Marketplaces, such as Healthcare.gov or a state marketplace | Insurance companies, small employers with 50 or fewer employees, and government agencies. | Applicable large employers with 50 or more full-time employees. |
| Receiver | Individuals who purchased health care coverage through federally and state-recognized marketplaces | Individuals who purchased private insurance coverage outside the Marketplace or through government programs, such as Medicaid and Medicare. | Employees hired by applicable large employers. |
| Purpose | It is used to reconcile advance premium tax credits on Form 8962 with your actual income and family size to determine whether you deserve a refund or owe the IRS. | It serves as proof that you received minimum essential health care coverage. | It states that you received employer-sponsored health coverage, even though you did not enroll. |
| File with Your Tax Returns |
No, but use the information on the form to fill out Form 8962 and reconcile advance payments of the premium tax credit. |
No. It is for record-keeping purposes. |
No. It is for record-keeping purposes. |
| Filing Deadline | January 31 | Not required to file (deadlines vary annually per IRS guidance) | Not required to file (deadlines vary annually per IRS guidance) |
Obtaining Form 1095-B and filling it may seem straightforward, but managing the broader landscape of benefits documentation and compliance can be overwhelming for HR teams.
At Ethos Benefits, we are employee benefits consultants who simplify benefits administration by handling eligibility management, compliance oversight, and employee communications, so you don’t have to rush at the last minute.
Additionally, we bring fiduciary-driven expertise so that your HR team is always in the know about the documentation process.
Schedule a call today to learn how we can partner to streamline your benefits administration process and compliance.
Do You Need Form 1095-B to File Your Taxes?
No, you generally do not need to file Form 1095-B along with your federal tax returns. The purpose of Form 1095-B is to verify minimum essential health care coverage for you and your dependents and is therefore not a necessity when filing taxes.
The IRS stopped requiring proof of health care coverage when filing federal taxes after reducing the individual shared responsibility penalty to $0.
However, there is an exceptional circumstance under which you may require Form 1095-B when filing taxes. That is:
- When filing taxes, individuals in states with their own individual health insurance mandates, including California, New Jersey, Massachusetts, Rhode Island, and Washington, D.C.
- Such states may require you to confirm coverage or keep documentation.
In any case, even though filing Form 1095-B is not necessary, it is vital to keep the Form in your records just in case of an audit, state requirement, or to answer future questions about coverage.
Who Receives Form 1095-B
Form 1095-B is received by individuals who had minimum health care coverage for a specific tax year from non-Marketplace insurance providers. Therefore, if you had health care coverage through the following providers, you will receive a Form 1095-B:
- A Private Insurance Company: Coverage purchased directly from an insurance company, outside of the Health Insurance Marketplace.
- A Small-Employer Sponsored Health Plan: Coverage provided by an employer with fewer than 50 employees.
- Those enrolled in Government Programs such as Medicaid, Medicare, and the CHIP.
- Individuals with self-insured plans, including those covered under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
- Uniformed service members, retirees, and their family members who are covered under TRICARE or the Veterans Affairs (VA) health coverage.
The insurance provider or employer typically sends the form to the primary policyholder. However, they also list your dependants, such as spouses and children.
Keep in mind that if you have health care coverage from multiple sources in a given year, you may receive more than one 1095-B Form.
What Information is Included on Form 1095-B?
Form 1095-B has several sections, with each section containing specific details about your health care coverage. Some of the key information contained in the form includes:
- Your name, address, Social Security Number (SSN), and Tax Identification Number (TIN) if you are the policy’s primary holder.
- The names and SSNs of your covered dependents.
- The name, address, and Employer Identification Number (EIN) of your employer if you are employer-insured. Otherwise, provide the details of your insurance provider or government agency, such as Medicare.
- Dates when your coverage began and ended.
- A month-by-month indicator showing which months your coverage was active.
Before filing the form in your records, review the information to ensure it is accurate. This will help you avoid complications later on, for example, during an audit.
How to Use the 1095-B Form for Tax Filing
You do not need to use Form 1095-B when filing your federal tax returns. It is a supporting document that provides proof to the IRS that you received minimum essential health care coverage. The IRS uses the document to verify compliance with the ACA’s healthcare tax provisions.
However, it is vital to keep the form together with your other tax documents, such as the W-2. You may need it in the following circumstances:
- When responding to an IRS or state audit.
- When verifying information later, such as the coverage dates, to complete another form or application.
- When reporting health coverage on your state tax returns, if you live in a state with its own health insurance statutes, such as California or Vermont, among others.
Generally, when filing your tax returns, there is a “Yes” or “No” question concerned with your health care coverage status that does not require you to enter details from Form 1095-B.
Where to Get the 1095-B Form
Form 1095-B is sent directly to you by your insurance provider, employer, or government agency providing coverage, such as Medicare. You can receive the form by mail, through your insurer’s online health portal, or via secure electronic delivery if you opted in.
Please note that your insurance provider must deliver the form to you by January 31, regardless of the delivery method used.
Can I Get My 1095-B Form Online?
Yes. Most insurance providers offer a member portal where you can log in and download it. However, depending on your provider’s policies, you may not automatically receive the form electronically unless you enrol for paperless communication first. Additionally, veterans can obtain the form from the Veterans Affairs website at VA.gov.
How to Get a Copy of My 1095-B Form Online
Follow these steps to obtain a copy of your Form 1095-B online:
- Visit your insurance provider’s website. For Medicare and VA beneficiaries, visit Medicare.gov and VA.gov, respectively.
- Sign in to your member or beneficiary account.
Navigate the portal to find a link named “Tax Forms”, “Tax Documents”, “Statements”, or “My Coverage”. - Download or print a copy.
What to Do If You Don't Receive Form 1095-B
If you are eligible to receive Form 1095-B but did not receive it, you should follow these steps to ensure you get it:
- Confirm that you had qualifying health care coverage provided by a non-Marketplace insurance provider.
- Check your online insurance member’s account. Insurance providers are required to send you the form by January 31; however, due to unforeseen circumstances, there may be a delay, and it may arrive in early February.
- Verify your mailing address with your provider to ensure they have the appropriate location to send the mail.
- Contact your insurance provider, employer, or relevant government agency directly to request a duplicate copy. Medicare beneficiaries can contact the agency directly via 1-800-MEDICARE.
Lastly, you should know that failure to receive Form 1095-B does not prevent you from filing your taxes, since you do not need to attach it to your tax returns.
Common Misconceptions About the 1095-B Form
Several misconceptions surround Form 1095-B. Below is a list of the most common misconceptions. Let’s clear them up.
- You Must Wait Until You Receive Your Form 1095-B Before You File Your Tax Returns: This is false. You can use information from other sources to file your tax returns, such as pay stubs and insurance cards.
- You Must Attach it to Your Tax Returns: This is false. The form is primarily for your records. It will also allow you to verify that you received qualifying coverage if the IRS questions it.
- The IRS will Penalize You for Not Having the Form: Although there used to be a penalty for not having minimum essential health coverage, that penalty no longer applies. The IRS reduced the penalty to $0.
- Form 1095-B Affects Your Refund Amount: This is false. The form does not influence your ability to receive tax refunds and credits or affect your tax liability. Only Form 1095-A can affect your refunds, as it is used to reconcile advanced premium tax credit payments.
- Forms 1095-A, 1095-B, and 1095-C are the Same: This is incorrect, since different insurance providers provide all three forms, and they serve different purposes. Form 1095-A is provided by health insurance Marketplaces, such as Healthcare.gov, while Form 1095-B is provided by non-Marketplace insurance providers, such as private insurance companies, small employers, and government agencies. Lastly, Form 1095-C is provided by applicable large employers.
Frequently Asked Questions (FAQs)
Below are answers to common questions we receive from current and potential clients.
Can I Receive Multiple 1095-B Forms in One Year?
Yes, it is possible to receive multiple 1095-B forms in a year. This can happen if you had coverage from more than one insurer, had overlapping plans, changed your insurance provider, or had different types of coverage, such as private insurance and Medicaid, in a given year.
What Happens If My Dependent is Missing From the 1095-B Form?
If your dependent is missing from the form, you should contact your insurance provider or, if self-insured, your employer to report the incident. You should then request a corrected form and verify that the insurer has your dependents’ correct information, such as Social Security Numbers and Tax Identification Numbers.
Is the 1095-B Form Sent Every Year Automatically?
Many insurers, employers, and government agencies, such as Medicaid, no longer automatically mail the 1095-B to users. Instead, they only provide a mailed form upon request or make it available online for you to retrieve.
Can Seniors Ignore the 1095-B Form if They Have Medicare?
Yes, seniors on Medicare can generally disregard Form 1095-B when filing their federal income tax returns. However, if you live in a state with a tax mandate requiring Form 1095-B, it is crucial to maintain your records to avoid state penalties.
Conclusion
Form 1095-B is an IRS tax document that provides proof you received health insurance coverage.
Although it does not play a significant role when filing federal tax returns, it is an essential document for your records, as it can help you during state tax filing and health coverage verification.
Understanding the purpose of Form 1095-B and how to obtain it can significantly reduce your stress come tax filing season. However, the bigger challenge is staying up to date on the ever-evolving compliance requirements, which is why you need a trusted partner with fiduciary-level expertise in benefits management.
At Ethos Benefits, we partner with our clients to help them meet their employee benefits plan compliance requirements while also easing the administration burden on HR teams.
Additionally, we’ll help you complete documentation on time so you don’t rush at the last minute, which we have found can lead to errors that expose companies to financial and legal liability. Our flat-fee model means our services are not tied to your plan costs.
Book a one-on-one call and discuss if we are a good fit.
