What is a 1095-c form?

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is an informational return used in the United States to report information about the health insurance coverage offered to employees by employers who are Applicable Large Employers (ALEs). ALEs are generally employers with 50 or more full-time employees (including full-time equivalent employees).

Here's a breakdown of key information about Form 1095-C:

• Purpose: This form is primarily used by the IRS to help enforce the Affordable Care Act (ACA) employer mandate. It verifies whether ALEs offered affordable minimum essential coverage to their full-time employees and their dependents. Individuals don't use this form to file their taxes; instead, they use the information on it to complete their own tax returns (Form 1040).

• Who Receives it: Employees of Applicable Large Employers (ALEs) receive a 1095-C form from their employer.

• Information Included: The form includes details such as:

  • Employer Identification Number (EIN): The employer's tax identification number.
  • Employee's name and address: The recipient's personal information.
  • Employee's Social Security Number (SSN): The recipient's social security number.
  • Months of coverage: The months for which the employee was offered health insurance coverage.
  • Offer of coverage: Indicates whether the employee was offered minimum essential coverage.
  • Safe harbor affordability test: Indicates whether the employer's offered coverage met the ACA's affordability standards.
  • Type of coverage offered: Specifies the type of health insurance plan offered (e.g., self-only, family).
  • Individual Mandate: This information is used to determine if the individual owes an individual mandate penalty (though this penalty was eliminated under the American Rescue Plan Act of 2021).

• Employer's Responsibility: ALEs are required to file Form 1095-C with the IRS and provide a copy to each of their full-time employees by the end of February. They also must provide a separate summary of coverage to the IRS.

• Employee's Use: Employees use the information on Form 1095-C to determine if they need to reconcile their own health insurance coverage for the purposes of avoiding potential penalties (although again, the individual mandate penalty is currently eliminated). The information is particularly helpful for individuals who may have received a 1095-B from a marketplace insurer to verify continuity of coverage.

It's important to note that the information provided here is for general understanding only. Tax laws and regulations are complex, and you should consult with a tax professional for advice specific to your situation.