2016 Form 1095 Updates

The IRS issued Notice 2016-70 on November 18,2016, giving employers an additional 30 days to deliver ACA forms to employees.  This Notice extends the deadline to deliver ACA reporting forms (Form 1095-C) to employees from January 31, 2017 to March 2, 2017.  The extension applies for tax year 2016 only. 

As was the guidance for 2015, employees may file their personal income taxes without having to attach the relevant Form 1095 to their tax returns.  Taxpayers; however, should keep the form with their other tax-year documents, as the IRS will request to view them if the taxpayer is audited.

 

Form 1095

You and/or your family members will likely be receiving some new tax forms this year in connection with your 2015 taxes. Some of the these forms may be relevant for you to complete your tax filing to prove you and your family had health coverage and avoid having to pay the individual mandate penalty that is part of healthcare reform, or the Affordable Care Act (ACA). 

You may also receive forms reporting information that is relevant to the employer mandate under the ACA. Generally speaking, you will not need to do anything with that information. But we wanted to provide a basic description of those forms as well to help you make sense of all the forms and distinguish the employer mandate information from the information you need to complete your individual taxes.

The 1095 ABCs

There are three different versions of these new forms that you and your family may receive:

  • 1095-A: You will only receive this form if you or a family member purchased an individual policy through a state or federal health insurance exchange. The form will come from the health insurance exchange.
  • 1095-B: You will receive this form if you or a family member obtain your health insurance from:
    • An employer through a fully-insured health insurance policy (the form will come from the insurance company);
    • A small employer through a self-funded health plan (the form will come from the employer);
    • A union health plan (the form will come from the union plan);
    • A government health care plan, e.g. Medicare (the form will come from the government agency sponsoring the plan).
  • 1095-C: You will receive this form in one of two circumstances (in either case the form will come from the employer):
    • You or a family member were a “full-time employee” (as defined by the ACA) at any time during the year;
    • You or a family member obtained your health insurance coverage from a large employer through a self-funded health plan.

Note that depending on your circumstances, you and your family may receive multiple 1095As, 1095Bs, and/or 1095Cs from different reporting entities.

Normally, you would receive these forms on the same time frame as your W-2, i.e. no later than February 1, 2016. However, the IRS extended the deadline for reporting entities to issue 1095Bs and 1095Cs for the 2015 tax year from February 1, 2016 to March 31, 2016 so you and your family may not receive some of your 1095s until after February 1, 2016. The reporting entity will also file these forms with the IRS.

1095 & Your Individual Tax Return

While you may receive multiple forms, generally speaking only some of the data on those forms will matter to you for your individual tax return.

  • If you or any of your family members obtained health coverage through a state or federal health insurance exchange in 2015 then the forms that matter the most to you are:
    • 1095A and 1095C Part II.
    • The information on these forms is relevant to determining whether you were eligible for a premium tax credit in 2015.
  • If you and your family members all obtained your health coverage in 2015 from anywhere else (employer plan, union plan, non-exchange individual policy, government program) then the forms that matter most to you are either:
    • 1095B and/or 1095C Part III.
    • The information on these forms is relevant to prove that you had health coverage in 2015.
    • In this situation, the information in 1095C Part II is generally only relevant for purposes of the employer mandate and is not necessary for your individual tax filing.

Because of the extension of the deadline for issuing 1095Bs and 1095Cs for 2015, you may not have all of your 1095s by the time you file your taxes. The IRS has indicated that, for 2015 only, you can file your taxes even if you have not received the necessary 1095s by relying on other sources information to verify that you were enrolled in health coverage or the cost of employer coverage (e.g. rate sheets showing the cost of enrolling in an employer’s health plan; enrollment cards for you or your family members, etc.). You will not be required to amend your tax return once you receive the missing 1095s.

Everyone’s tax situation is different and you should consult with your tax advisor to verify which forms you need to complete your individual tax return.