Difference Between 1095 Forms: 1095-A vs. 1095-B vs. 1095-C

Employers may become overwhelmed by health insurance paperwork and reporting responsibilities. Under the Affordable Care Act (ACA), the IRS requires all applicable employers and qualified health plan providers to report information about their health plans and health coverage enrollment using tax Forms 1095 A, B, and C. However, there are different requirements for each of these documents. Learn more about the difference between 1095-A, 1095-B, and 1095-C, including who issues and files them, what information is on them, and what employers require.

What Is Form 1095-A and What Is It Used For?

The 1095-A form, also known as the Health Insurance Marketplace Statement, is for those who didn't have access to or chose not to take part in an employer-sponsored plan and instead had health insurance through the Health Insurance Marketplace (also commonly known as an exchange) in the previous year.

The form includes the total amount of premiums paid, the premium tax credits (PTC) used, and a figure referred to as the second lowest cost Silver plan (SLCSP), the second-lowest priced Marketplace plan in the Silver category. This figure is needed to determine the final premium tax credit.

Recipients use Form 1095-A to fill out Form 8962, Premium Tax Credit. This refundable credit helps cover health insurance premiums purchased through the Health Insurance Marketplace.

Who Must File 1095-A?

Individuals who had health insurance through the Health Insurance Marketplace must use the information found on Form 1095-A to complete Form 8962. Once they've completed the form, it must be filed with the individual's federal income tax return if they wish to claim a premium tax credit or have received assistance through advance payments of the premium tax credit (APTC).

Who Issues Form 1095-A?

The Marketplace is responsible for sending 1095-A forms to enrolled individuals. Employers do not have to send employees 1095-A forms. If a person who received health coverage through the Marketplace did not receive a 1095-A, they should contact the Marketplace health plan provider.

What Is Form 1095-B and What Is It Used For?

Form 1095-B, Health Coverage, is a tax form used to report certain information to the IRS (type of plan, period of coverage, and the names of dependents covered by the plan) and to individuals who are covered by the minimum essential coverage required by the Affordable Care Act.

Consumers must have 1095-B to verify on their taxes that they and their dependents had at least minimum essential coverage in the previous year.

Who Must File 1095-B?

Tax Form 1095-B is sent to taxpayers, their spouse, and their dependents if they were enrolled through a self-insured employer that is not an Applicable Large Employer (ALE) or insurance provider the previous year. Taxpayers don't need to attach Form 1095-B to their return; they should keep it with their tax records. Beginning January 1, 2019, the individual mandate penalty at the federal level for not having health coverage was reduced to zero. Still, some states implemented their own state- and district-level individual health insurance mandates with reporting requirements and associated penalties.

Self-insured small businesses must file Form 1095-B to report information on individuals provided minimum essential coverage.

Who Issues Form 1095-B?

The 1095-B form is mailed to individuals and issued by health coverage providers, which may be one of the following:

• Insurance companies outside the Marketplace
• Government agencies such as Medicare or CHIP
• Employers that provide certain kinds of health coverage (also known as "self-insured coverage") but do not have to send Form 1095-C (see below)
• Other coverage providers

What Is Form 1095-C and What Is It Used For?

Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) is a tax form that documents the health insurance coverage offered and whether an employee is enrolled in it. The form must be filed and furnished to applicable employees if your business is an applicable large employer (ALE) — meaning you have, in general, an average of 50 or more full-time employees, including full-time equivalents, during the prior calendar year, regardless of whether they enrolled in the company-sponsored health plan — or your business is self-insured. ALEs must report that information for each employee for all 12 months of the calendar year.

The IRS uses information reported on Form 1095-C to determine if an employer or employee is responsible for any fines for failure to comply with the ACA.

If an employer is not an ALE, they're not required to file Form 1095-C. However, if a business is, in fact, an ALE and doesn't file these forms, the IRS can determine if it appears an employer is large enough to be an ALE. In such a case, the IRS may send out requests for missing returns and possibly issue penalties if a business doesn't respond promptly or with the proper information.

Who Must File 1095-C?

Applicable large employers must file a separate Form 1095-C for each full-time employee. Employees will use this information to complete their taxes, but they don't have to send a copy of this form to the IRS when they file. They should keep it with their tax records.

Self-insured ALEs must also file Form 1095-C to report information to the IRS and employees about individuals enrolled in coverage under the employer plan.

Employers must also file completed Form 1094-C, a summary of the aggregated 1095-C forms filed for a given calendar year. This form, sent to the IRS, includes contact information and the employer's Employer Identification Number (EIN), the contact person's name, and the total number of employees.

Forms 1094-C and 1095-C must be filed regardless of whether an ALE offers coverage or whether the employee enrolls in any coverage offered. Given how complex and time-consuming it can be to verify, catalog, and report accurate data, many businesses rely on ACA compliance and ESR reporting services to help them compile the necessary information to deliver Form 1095-C to employees and file Forms 1094-C and 1095-C with the IRS.

Who Is Required to Issue Form 1095-C?

ALEs must issue a Form 1095-C to every full-time employee, regardless of whether employees are enrolled in a company-sponsored health plan. Employers must also keep a copy of every 1095-C form to send to the IRS to fulfill ACA reporting requirements or risk possible assessments.

Make Sure You and Your Employees Understand What Forms You Need at Tax Time

The steps required to meet ACA requirements take a considerable amount of time. An integrated solution that combines benefits, payroll, and insurance data can take much of the burden off your shoulders at reporting time.

An ACA reporting service such as Paychex Employer Shared Responsibility Services can help you prepare and file complex tax forms, send completed Forms 1095-C directly to your employees, and analyze and monitor the type and affordability of your offered coverage throughout the year.*