Understanding IRS Form 1095

Posted on behalf of Sheryl Gordon

The New 1095 Tax Form Related to Health Care -Do you know what it is?Insurance1095

Many employees have started getting a new mandated tax form related to health care reform measures in the mail. In Green River’s case, the Washington Health Care Authority (PEBB) is mailing the forms to employees on our behalf.

The Affordable Health Care Act, sometimes referred to as “Obamacare,” mandated a new tax form (actually three new forms) to be used as a kind of proof of health insurance so taxpayers can avoid paying a penalty for failure to be covered. The 1095 form is really the mechanism that the IRS is going to use to assess whether or not each person has the required minimal essential coverage, and it’s what the individual is going to use to demonstrate that they’ve got the coverage.  If you had multiple insurance sources, you may get more than one form.

You might think of the 1095-C form as the healthcare W-2. Employers use the W-2 to report to the IRS their employees’ wages and taxes deducted from their paychecks. Employees get a copy with important information needed for filing their tax returns.

In the same manner, large employers will use the 1095-C to report to the IRS that they offered their employees affordable health insurance, which is now required through the Affordable Care Act.

It’s IMPORTANT to note that Form 1095-B or 1095-C is NOT REQUIRED for filing 2015 tax returns. According to the IRS, an employee may use an insurance card, W-2, or other documentation when filing their taxes. As with all other tax documents, however, you are encouraged to keep all 1095’s you receive.

If you were enrolled in PEBB’s employer-sponsored Uniform Medical Plan during 2015, you will receive Form 1095-C; if you were enrolled in PEBB’s employer-sponsored Group Health Plan during 2015, you will receive a Form 1095-B from Group Health AND a Form 1095-C from the WA Health Care Authority (mailed on behalf of Green River College). Retirees of Green River College (even if they retired years ago) who are covered under PEBB Retiree Coverage (and their covered spouses/eligible partners) will also receive a Form 1095-C from the WA Health Care Authority. (Another Form 1095-A is mailed by the state exchange (WA HealthPlanFinder) to persons who purchased insurance through the exchange)).

The appropriate 1095 form will come to you, and employers and insurance companies will file other versions (1094 forms) directly with the IRS. These will serve as your proof of coverage, and you will put information from them on your tax form. Information about the 1095-C and its separate instructions are at www.irs.gov/form1095c.

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