What to know about health insurance and 1095 forms

I’ve been hearing about these 1095 forms lately. Can I expect to get one?

Large employers (with 50 plus full-time employees) will send each of their employees an IRS Form 1095-C. If you work full time for a larger employer, you will get this form. On it, you must report if you were offered health insurance and if you accepted it. If you are self-employed or work for a small company and you have health insurance, you may instead get a Form 1095-B. You might get both a “C” and a “B” version of the form.  If you got health insurance through Healthcare.gov, then you will get a Form 1095-A.

What do I do with the form once I complete it?

These forms do two things: they (1) report to the IRS if you satisfy the “individual mandate” to have health insurance and (2) determine whether you are eligible for a premiu0m subsidy. Most people who get a 1095-C aren’t eligible for premium subsidies. Form 1095-A reports premium subsidy information. If you get a Form 1095-A, give it to your tax preparer.

If I’m doing my own taxes, what do I do with the Form 1095-A?

On the back of your Form 1040, you will see a checkbox for “full year coverage” for everyone who may be listed on your tax return. If everyone had health insurance for the entire year, you simply check the box.  If not, you’ll need to complete the questions on Form 8965 to explain why someone didn’t have insurance.

What should I know about open enrollment on Healthcare.gov for 2016?

When you apply for coverage on healthcare.gov, you have to estimate your income for 2016.  Based on that, you may get offered a premium subsidy. But, when you file your 2016 taxes you have to “true up” your estimate with what actually happened – you may get more subsidy or you may have to pay some of it back. We are finding that a lot of people are requesting more subsidy than they are entitled to (on the tax return) and end up paying it back.  You might want to talk to your CPA to help you get an estimate income number. Remember that all kinds of income, even certain tax exempt income, count for the premium subsidies, and more income means less subsidy.

My employer insurance is really expensive. Are there any other options for me or my family?

You can always go to Healthcare.gov to get insurance. You won’t get premium subsidies if your employer offered you coverage (assuming you’ve been offered affordable, minimum-value coverage). However, your family might be eligible for premium subsidies if your employer does not offer coverage for family members. The Healthcare.gov coverage prices are based almost exclusively on age. If you are relatively young, the price you are being asked to pay for employer coverage may be higher than the full price you would have to pay through Healthcare.gov. Also, if you are comfortable with higher-deductible coverage, you may be able to save money by purchasing coverage through Healthcare.gov.

This column was provided by the Ohio State Bar Association. It was prepared by Joseph R. Popp, JD, LLM, tax manager for Rea & Associates, Inc. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek the advice of a licensed attorney.

© 2016 Metro Monthly. All rights reserved.

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