The Affordable Care Act—or “Obamacare” as it is commonly known—made health insurance mandatory for U.S. citizens. It also required certain employers, known as applicable large employers or ALEs, to offer coverage to its full-time employees. These two new requirements come along with two new forms that you will need to file your taxes. The Jones CPA Group wants you to be informed about these forms so that you can ensure you have everything on hand for filing your taxes.
The 1095-B form is sent out by health insurance companies to every individual who was enrolled in their health care plans during the tax year. This form outlines who in the employee’s family was covered under the plan and the amount of coverage received through the plan. Your health plan must provide a minimum level of coverage for you to avoid paying the tax penalty for being uninsured.
So here’s everything you need to know about receiving this form as an individual, or issuing this form as a business owner.
1095-Bs will begin to be sent out in January of 2016. However, the deadline for issuing these forms is not until March, so you may have to delay your tax return until you receive this form. You cannot file without it, as it acts as evidence that you had the minimum essential coverage, sparing you from having to pay the tax penalty for being uninsured.
The 1095-B will specify how many months of the year each insured member of your family was covered for. If there were gaps in your insurance coverage, you may be required to pay a tax penalty for that uninsured portion of the year. Gaps in coverage that last less than 3 months are exempt from any penalties, and there are a few other exemptions as well. You should speak to your CPA to see if you qualified for any of these exemptions.
When the Affordable Care Act was put into action, it required employers to offer health insurance to all full-time employees and dependents. In conjunction with this, ALE’s were also required to send statements to employees every year that describes their available insurance options. Form 1095-C serves as this statement. Keep reading to learn how this form relates to both individuals and business owners.
You will receive the 1095-C from your employer whether you are insured through your company’s health insurance plan or not. Though it may seem like it is “only” a statement, it is still important that you retain this form for your tax records. It should be sent to you by the end of March.
Whether or not you need to file a 1095-C and send them to your employees will once again depend on whether or not your business is considered an ALE. Only ALEs need to file Form 1095-C. These business will need to send the forms to their employees and to the IRS to show that health insurance was offered to all employees.
The Affordable Care Act can make your taxes a bit more complicated than before, so if you have any questions about these two new forms, tax penalties for being uninsured, or any other tax-related matter, be sure to call or stop by The Jones CPA Group in Orem. We can offer you the advice and tax help that you need.