Individual taxpayers are not required to fill out the form or file it with their tax returns. That responsibility lies with the employer. As far as employees are concerned, Form 1095-C is a reference document that should be kept for their personal records. The information provided by Form 1095-C helps determine a taxpayer’s eligibility for credits, such as the premium tax credit.
Alternate name: Form 1095-C
Who Needs To File Form 1095-C?
Form 1095-C must be completed and filed by any ALE—an organization that employs at least 50 full-time individuals—and can be either one entity or a group of related entities. ALEs must file and furnish Form 1095-C for every individual employed by them for at least one month out of the calendar year, and the form must report health insurance coverage information for all 12 months of the year.
What Coverage Does Form 1095-C Confirm?
The 2010 ACA includes employer-shared responsibility provisions, also known as the employer mandate. The employer mandate requires ALEs to provide affordable minimum essential health care coverage to all full-time employees. To qualify as minimum essential coverage, employer insurance plans must cover at least 60% of the total allowed cost of benefits expected to be incurred under the plan. To qualify as affordable, employer plans must require the employee to contribute no more than 9.5% (as adjusted) of that employee’s household income. Alternatively, because it is often difficult for organizations to determine their employees’ household income, employers can calculate affordability by using Form W-2 wages, the employee’s rate of pay, or the current federal poverty level.
How Is Form 1095-C Structured?
Form 1095-C consists of three parts. Part I comprises the employee’s personal information, including their name, address, and Social Security number. Part I also reports the ALE’s information, including identifying details and contact information. Part II of Form 1095-C provides the employee’s age and the details of monthly coverage provided to the employee. Part II also reports employee contribution totals. Part III of Form 1095-C is only completed if the ALE provides a self-insured plan. This means the employer itself collects premiums from enrollees and is responsible for paying employees’ and their dependents’ medical claims. Part III provides identifying information for each insured employee and lists the months of coverage.
Other Relevant Forms
In the event that the ALE only completes Parts I and II, the employee may also receive IRS Form 1095-B: “Health Coverage.” Form 1095-B is used when employees are covered by minimum essential coverage and are thus not liable for the individual shared responsibility payment. It contains the employee’s personal information, details about the employer-sponsored coverage, issuer information, and details about covered individuals. IRS Form 1095-A is issued to individuals who obtain healthcare through a health insurance marketplace carrier. Like the 1095-C, Form 1095-A is not meant for filing but should be kept with personal records. Form 1095-A details recipient and coverage information.
