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7 FAQs to Better Understand Form 1095-C

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*Updated for tax year 2016.

7 FAQs to Better Understand Form 1095-C - TaxAct Blog

In January, aside from receiving your usual Form W-2 from your employer, you may receive Form 1095-C related to the Affordable Care Act (ACA).

If you received health insurance outside of the marketplace exchanges in 2016, and worked for a large employer, look for Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to arrive in your mailbox.

Employers have until January 31, 2017 to distribute the form.

What is Form 1095-C?

The IRS Form 1095-C is a form that reports to the IRS if you had the minimum essential coverage required under the ACA and also which months of the year you had the qualified coverage.

Why is it so important to prove I had minimum essential coverage?

Under the ACA, you must have coverage for yourself, your spouse and your dependents for at least ten months of the year in 2016 or pay a penalty.

This penalty is called the “individual shared responsibility payment.”

The penalty for 2016 returns (due April 18, 2017) is the greater of the following amounts:

  • 2.5 percent of your household income, or
  • $695 per adult and $347.50 per child under 18 (up to $2,085 for a family)

There are exceptions to the rule, however. If you qualify for certain exemptions you may not owe the penalty.

What’s the difference between Form 1095-A, 1095-B and 1095-C?

Form 1095-A, Health Insurance Marketplace Statement, is for people who have health insurance through the Health Insurance Marketplace, often called an exchange.

When preparing your 2016 federal return, you need to use this information to complete your income tax filing, claim premium tax credits and adjust any tax credit payments.

Form 1095-B, Health Coverage, should come in the mail if you purchased or received insurance outside of an exchange.

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is required by companies who meet the qualifications to be considered Applicable Large Employers.

This includes employers with 50 or more full-time employees in the preceding calendar year.

How do I enter information from Form 1095-C in TaxAct?

TaxAct’s easy Q&A interview will ask you questions about your coverage, including how many months you had insurance and who was covered under the plan.

Answers to those questions will be on your Form 1095-C. If everyone included on your tax return had coverage for all 12 months of 2016, you simply check a box and are finished!

If you or someone else lacked coverage, TaxAct will then guide you to enter the appropriate information.

Should I attach Form 1095-C to my tax return?

No, Form 1095-C is for your records only. Do not attach it to your return. Your employer sends a copy of to the IRS, which they then use to match with the information you enter.

I want to file my tax return, but my Form 1095-C hasn’t arrived yet. What should I do?

Don’t wait to file your return until you receive Form 1095-C. Simply follow TaxAct’s Q&A interview and enter the information you know about your coverage.

Once you receive the form, keep it in a safe spot in case you need to reference it later.

Can I get a copy of Form 1095-C for my adult children who are on my insurance plan?

Your employer is only required to provide one Form 1095-C to the primary policyholder. If you have other people on your plan, such as adult children, make copies for them so they can prepare their tax returns.

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