Form 1095-C: Employer-Provided Health Insurance Offer and Coverage is a crucial IRS tax document that reports information about an employee’s health coverage extended by an Applicable Large Employer (ALE). Typically, an ALE has 50 or more full-time employees.
Information derived from this form assists in determining a taxpayer’s eligibility for credits like the premium tax credit.
Key Takeaways
- Form 1095-C delivers detailed information on an employee’s health coverage offered by an Applicable Large Employer.
- Applicable Large Employers (ALEs) commonly have 50 or more full-time employees.
- Taxpayers do not complete or file this form with their tax return; employers generate and maintain it.
- Data from Form 1095-C aids in determining eligibility for financial aids such as the premium tax credit.
- The premium tax credit is a refundable credit to help eligible individuals and families cover premiums for health insurance through the Health Insurance Marketplace.
Comprehensive Coverage: Who Can File Form 1095-C?
This form is issued by Applicable Large Employers to full-time employees employed for one or more months of the calendar year. ALEs must report the respective information for each employee spanning all 12 months or the entire calendar year.
Understanding the Premium Tax Credit
The premium tax credit is a refundable credit aimed at assisting eligible individuals and families in covering the premiums for health insurance bought via the Health Insurance Marketplace.
How to Navigate Form 1095-C Filing
Form 1095-C serves as a reference document and isn’t filled out by taxpayers. It remains with taxpayer records for future reference.
- Part I contains information about the ALE member, including their name, address, and telephone number to address any inquiries or errors.
- Part II describes the healthcare coverage, if any, provided to the employee. It covers details about the plan and necessary employee contributions.
- Part III is exclusive to employers offering a self-insured plan. It lists all covered individuals, including their Social Security numbers and birthdates, and notes any uncovered months.
Form 1095-C can be accessed directly from the IRS website.
Dive Deeper: Other Relevant Forms
- If Parts I and II are completed, the employee might also receive Form 1095-B: Health Coverage, from the chosen insurer, providing proof of coverage.
- Form 1095-B assists employers in informing the IRS and beneficiaries about minimum-essential coverage status, eliminating individual shared responsibility payment liabilities.
- Individuals obtaining insurance through the Health Insurance Marketplace will receive Form 1095-A: Health Insurance Marketplace Statement. This document does not need to be filed with the government but should be kept as a record of health coverage. It details coverage start dates, premiums paid, and preliminary premium tax credits or subsidies.
What’s The Use of Form 1095-C?
Form 1095-C provides details about the health coverage proposition and whether an employee enrolled in such a plan. This form plays a pivotal role in helping to ascertain eligibility for the premium tax credit.
Is Form 1095-C Necessary for Your 2021 Taxes?
You’re not required to incorporate Form 1095-C with your tax return or send it to the IRS, but it may prove useful in completing your tax filing process.
How Can You Obtain Your 1095-C Tax Form?
Your employer is responsible for issuing Form 1095-C if it employs 50 or more full-time workers. This form is also accessible on the IRS website.
Essential Guidance: Filling Out Form 1095-C for 2021
Instructions for completing the 1095-C form for the 2021 tax year can be found on the IRS website. Note that most portions of the form are pre-filled by the employer.
Related Terms: Form 1095-B, Form 1095-A, Premium Tax Credit, Health Insurance Marketplace, Self-Insured Plan.
References
- Internal Revenue Service. “About Form 1095-C, Employer-Provided Health Insurance Offer and Coverage”.
- Internal Revenue Service. “The Premium Tax Credit - The Basics”.
- Internal Revenue Service. “About Form 1095-B, Health Coverage”.
- HealthCare.gov. “How to use Form 1095-A”.
- Internal Revenue Service. “Health Insurance Marketplace Statements”.
- Internal Revenue Service. “Questions and Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C)”.
- Internal Revenue Service. “2021 Instructions for Forms 1094-C and 1095-C”, Page 10.
