The ABCs of Health Insurance Tax Forms

By Guest Blogger

This guest post was written by Debra Hammer of Intuit TurboTax.

With the new year upon us, tax season is just around the corner! 2016 marks the second year that consumers are required to report their health insurance coverage on their taxes under the Affordable Care Act (ACA). Those who don’t maintain coverage or have an exemption must pay a fine on their tax return.

Last year, more than 8 out of 10 taxpayers simply had to check a box stating they had full-year coverage via their job, Medicare, Medicaid, or a private insurer. Reporting insurance coverage status will still be simple for many Americans, but there are a few important things to know about the process this year, including the Form 1095, which will be arriving in many consumers’ mailboxes soon!

What Does Form 1095 Mean for Consumers?

There are three types of 1095 forms: the 1095-A, 1095-B and 1095-C.

1095-A:

If consumers purchased health insurance on HealthCare.gov or a state-based Marketplace, they will receive a 1095-A. Consumers need this form before sitting down to file their taxes. It is used to compare the amount of tax credits paid during 2015 to their issuer (based on projected income), to the tax credit amount they are ultimately eligible for (based on their actual income). Consumers may get additional money on their return as a result, or may owe some back. With the help of TurboTax, reporting Marketplace insurance is as simple for consumers as entering their W-2 information.

1095-B and 1095-C:

Taxpayers whose health insurance is provided directly through Medicaid/CHIP or an employer may receive Forms 1095-B or 1095-C (new this year). These are receipts from private insurers, government agencies, or employers confirming consumers had or were offered coverage. But according to the IRS, consumers do not need these to file their 2015 tax return. Consumers should simply check them for accuracy if they receive and keep them for their records. Individuals are free to file their taxes without Forms 1095-B or 1095-C, as these forms don’t have to be sent by Medicaid agencies, employers, or insurance companies to people until March 31, 2016.

What’s the Connection Between Filing Taxes and Enrolling in Health Coverage?

While Marketplace open enrollment runs through January 31, 2016, the IRS begins accepting tax returns on January 19. Now is the time for the enrollment community to start preparing to help consumers navigate the tax filing season! If consumers you work with have questions about their health insurance options and how it impacts their taxes, TurboTax Health has free resources and tools to help them get answers and save money. We look forward to working alongside Enroll America to ensure that every consumer knows that getting covered and filing taxes can be as smooth as possible.

 

UPDATE: For more tips on tax season, check out the recording and slides from our January 26 webinar with TurboTax: “Tax Filing Season: What to Expect and New Opportunities for the Enrollment Community.”

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