Confused About IRS Health Coverage Form 1095-C?

Tobie Stanger
Updated

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Consumer Reports has no financial relationship with advertisers on this site.

IRS Form 1095-C, “Employer-Provided Health Insurance Offer and Coverage,” is a document your employer may have sent you this tax season (or will be sending you soon) in addition to your W-2 wage form. It details any employer-based health insurance coverage you had in 2018. Your employer also sends Form 1095-C to the IRS.

You might wonder why you’re getting Form 1095-C. Isn’t the Affordable Care Act’s tax penalty for not having health coverage dead?

No and yes.

The mandate for having coverage—and the tax penalty for not having it—is still law. But under Congress’ major tax overhaul, the penalty was changed to $0 starting Jan. 1, 2019.

For tax year 2019 and beyond you won’t receive Form 1095-C because the IRS won’t require proof that you had coverage.

But for tax year 2018—the year for which we’re preparing our returns now—the IRS still wants that proof. Form 1095-C confirms your coverage. 

Apparently lots of Americans are confused about this. A poll taken last year by the Kaiser Family Foundation found that only 19 percent of people who buy their own health insurance were aware the penalty was repealed but was still in effect for 2018.

What to Do With Your 1095 Forms

Form 1095-C is sent to those who worked full-time in 2018 for what the IRS calls “an applicable larger employer.” That means an employer with 50 or more full-time employees. You could get the form even if you weren’t a full-timer. You also could get more than one 1095-C if you worked for multiple employers. The IRS doesn’t send this form; employers do.

Form 1095-C complements two other health insurance disclosures: Form 1095-A, provided by your state’s healthcare marketplace, and Form 1095-B, supplied by the health insurer your employer used in 2018. You might not receive all three forms. 

The IRS has given employers until March 4 to send Forms 1095-B and 1095-C to employees. The deadline for state marketplaces to send Form 1095-A was Jan. 31. Here’s how to handle 1095 forms in different situations:

Your Household Had Employer-Provided Insurance Year-Round
You really don’t need to do anything with the Forms 1095-B and 1095-C except keep them with your records for tax year 2018. If you know you had coverage year-round, these forms are mainly for your reference. 

Don’t worry if you already filed your taxes and then receive Form 1095-C or 1095-B; you don’t have to file an amended return. And if you haven’t yet received either form 1095-C or 1095-B, don’t wait to prepare and file your returns.

“Employees don’t really need the info from the 1095s to complete their tax returns,” says Barbara Weltman, contributing editor of “J.K. Lasser’s Your Income Tax 2019” (Wiley, 2018).

Your tax preparer also might ask for these forms to confirm that you were covered, but you can get that information from other sources, including your employer or health insurer. For instance, your family’s health insurance cards will show when your coverage was effective.

You or Your Spouse Didn't Buy Insurance Offered by Your Employer
You’ll need a numerical code on Form 1095-C to help determine whether you’re exempt from the tax penalty for 2018 or you need to pay. If you’re using do-it-yourself tax software, it will prompt you with where to locate the code. 

The penalty, which will be subtracted from your federal tax refund or added to what you owe, is a maximum $695 per adult and $347.50 per child under age 18, up to a maximum of $2,085 per family.

To get a head start determining whether you’ll pay a penalty or be eligible for a premium tax credit, use the interactive tools on the IRS website.

You Were Enrolled in a Marketplace Health Plan for All or Part of 2018
In this case, you must wait for Form 1095-A to file your taxes. The information on 1095-A can also help determine whether you’re eligible for a premium tax credit to subsidize your 2019 coverage. If you haven’t received Form 1095-A yet, contact your state marketplace to ask for it.

“Trying to file without Form 1095-A could cause an issue and prevent your return from being processed until the error is remedied,” says Alison Flores, principal tax research analyst at H&R Block’s Tax Institute.



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