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Decoding Form 1095-B: A Closer Look At Health Coverage Reporting

Decoding Form 1095-B: A Closer Look At Health Coverage Reporting
Ines Zemelman, EA
16 January 2023

Waiting to receive Form 1095-B to file your tax return?

You don’t have to. You can get the information to fill in your tax return from other documents issued by your health coverage provider.

This health insurance tax form ensures that you and your family members have access to health care. It was once mandatory to have minimum essential coverage and there was a penalty for not having one. Post-2018 the penalty is no longer applicable.

If you are designated as a responsible individual in Form 1095-B you need to be aware of its tax consequences. Read on to find out what it is, why it matters, and how to navigate it with ease.

What Is Form 1095-B (Affordable Care Act)?

Form 1095-B serves as a record of your healthcare journey throughout the year and proof of insurance for taxes. If you have health coverage for yourself or your family members that is not reported on Form 1095-A or Form 1095-C, you will receive a Form 1095-B.

This form is filed by those who provide health coverage, also referred to as “Minimum Essential Coverage” (MEC), to individuals, their spouses, and dependents. MEC includes government & eligible employer-sponsored programs, individual market plans, and coverages that are officially designated as MEC.

These entities provide minimum essential coverage which is a necessary level of protection you need to stay healthy under the Affordable Care Act (ACA). The MEC you have under ACA is like a protective shield that helps keep you healthy. It ensures you and your loved one have access to financial resources when you are hit by health issues.

The ACA, popularly known as Obamacare, was enacted in 2010. It has reformed the entire healthcare system and set out to make healthcare more accessible and affordable to every American. It has:

  • Expanded public healthcare programs targeting low-income individuals and families.
  • Established a health insurance marketplace so private health insurance plans can become more accessible to small businesses and individuals.
  • Implemented consumer protection methods such as prohibiting insurers to deny coverage on pre-existing conditions.
  • Offering premium tax credit to financially assist individuals & families to afford health care.

Before 2019, ACA imposed penalties on Americans who failed to have minimum health coverage unless they are eligible for exemption. The tax penalty is no longer applicable from January 1, 2019.

However, some states still impose a penalty so you should check in with your state and local government to determine whether or not there exists a penalty for not having a MEC during the tax year.

What Info Is Included On Form 1095-B?

Form 1095-B has 4 parts.

Part I: Responsible Individual

The responsible person is the one whose name is identified as the primary beneficiary on the coverage. The rest of the individuals, such as spouses and dependents covered based on the relationship with the primary beneficiary, are a tax family.

In this part, you will find the identification information of the responsible individual such as Name, SIN number, DOB, address, etc.

Part II: Information About Certain Employer-Sponsored Coverage

If you have employer-sponsored coverage you will find its identification information here. This may or may not be relevant in your case.

Part III: Issuer Or Other Coverage Providers

This part contains information about the coverage provider which can either be:

  • Insurance company,
  • An Employer providing self-insured coverage,
  • Government programs sponsoring the coverage.

NOTE! You will find the contact details of your coverage provider here. You can get in touch with them if you have any questions.

Part IV Covered Individual

This part requires information about all the covered individuals along with the coverage months during the tax year.

Medicaid tax forms are used to determine whether you and your family have coverage that satisfies individual shared responsibility. The IRS states that:

“The individual shared responsibility provision requires taxpayers to do at least one of the following:

  • Have qualifying health coverage called minimum essential coverage,
  • Qualify for a health coverage exemption,
  • Make a shared responsibility payment with their federal income tax return for the months that without coverage or an exemption.”

Who Gets A Form 1095-B?

By the end of the first quarter of a tax year, you may receive health coverage forms indicating the number of months you were covered during the preceding year.

All insurance plans issued under ACA must cover essential health requirements such as emergency services, hospitalization, family planning, maternity care, pediatric care, prescription medication, and mental health services.

These forms provide information related to:

  • Health insurance coverage,
  • Individuals covered,
  • Coverage provider,
  • Effective coverage dates.

Depending on your coverage provider you may receive any of the following forms:

  • Form 1095-A. You get this form if you and your family members are enrolled in the health insurance marketplace.
  • Form 1095-C. You get this form if you are an employee of an applicable large employer, generally one that has 50 or more full-time employees.
  • Form 1095-B. If you receive neither 1095-A nor 1095-C then you will likely receive Form 1095-B. You get this form if you had coverage during the tax year through:

    • Government-sponsored programs such as CHIP or Medicare,
    • Eligible employer-sponsored plans. The one who has less than 50 employees,
    • Individual market plans,
    • Other coverage the Department of Health & Human Services designates as MEC.

A non-US citizen residing in America legally who has health coverage might receive either Form 1095-A, 1095-B or 1095-C.

What To Do With My Form 1095-B?

The information on Form 1095-B verifies that you, your spouse, and any dependents had the minimum essential coverage during the previous tax year.

Before Dec 2018 if you and your family members neither had the coverage nor an exemption then you were liable to make individual shared responsibility payments. Under the Tax Cuts and Jobs Act, this amount is Nil from January 1, 2019.

You don’t have to wait for this form to prepare your individual tax return. You can use the following related documents instead while preparing your tax return:

  • Statement issued by your insurer;
  • W2 or payroll statement reflecting health insurance deduction;
  • Insurance card.

NOTE! Your insurance provider is responsible to file this form with the IRS and send you a copy. You are not required to attach 1095-B with your tax return. However, you must keep it for the record with other medical tax documents.

What If I Have Problems With My 1095-B?

You might face challenges regarding the form 1095-B such as:

  • It arrived at your doorstep and you have no idea what to do with it;
  • You thought you were supposed to receive it but you are still waiting;
  • You might need a replacement form;
  • You spotted an error in the form that needs to be corrected.

Get in touch with your insurance provider to have the answers. It is always a good idea to come up with a preventive strategy with a tax pro when it comes to preparing your taxes so you don’t get penalized for something you didn’t know you were supposed to do.

FAQ

1. Do I need a 1095-B to file my taxes?

No, you don’t need 1095-B to prepare your return; you can find the information in other related documents such as insurance cards, statements you receive from your insurance provider, etc. You might not receive it by the time you are ready to file your taxes.  However, you need to keep it for your records with other tax documents.

2. How does a 1095-B affect my taxes?

Prior to December 31, 2018, if you didn't have minimum essential coverage you would be liable to a tax penalty, alternatively known as an individual shared responsibility. You no longer are required to pay a penalty. Get assistance from a tax specialist to find out whether or not you are eligible to get a premium tax credit.

3. How to get a 1095-B form online?

Form 1095-B is typically provided to individuals by their health insurance provider. The form should be mailed to your mailing address on file with your insurance provider. If you have misplaced the form, you should contact your insurance provider and request a copy to be sent to you, either via mail or email.

Some insurance providers also make the form available online through their member portals, which you can access by logging in with your login credentials. If your insurance provider offers this service, you should be able to download and print a copy of your Form 1095-B.

4. How to retrieve a 1095-B?

If you need to retrieve Form 1095-B, you can do so by contacting your insurance coverage provider and following their instructions. They might guide you to contact your local county to request a reprint of the Form. It might take up to 45 calendar days to process your request and send you the form via email.

Ines Zemelman, EA
Founder of TFX