Managing your finances can be a taunting task, especially when there are various terms and forms to familiarize yourself with. One such form is Form 1095-B. In this article, we’ll examine what Form 1095-B is, who needs to file it, key elements and information contained in the form, how to obtain a copy, filing deadlines, common mistakes to avoid, penalties for inaccurate filing or not filing, differences between Forms 1094 and 1095, how to file the form electronically and tips for successfully filing your Form 1095-B.
What is Form 1095-B?
Form 1095-B is a health coverage reporting form that is used by insurance providers to report information to the Internal Revenue Service (IRS) about individuals who are covered under a qualified health plan. The purpose of this form is to demonstrate that the individuals meet the minimum essential coverage (MEC) requirements of the Affordable Care Act (ACA).
Form 1095-B includes information about the individual who is covered, as well as the insurance provider and the duration of coverage. It is important to note that not all individuals will receive this form, as it is only required for those who have coverage through a government-sponsored program, such as Medicaid or Medicare, or through a private insurance provider. If you do receive Form 1095-B, it is important to keep it for your records and to use it when filing your taxes.
Who Needs to File Form 1095-B?
Insurers, self-insured employers, government agencies, and other providers of MEC are required to file Form 1095-B with the IRS for each individual who they have provided health coverage for during the calendar year. Additionally, they must provide a copy of the form to the individual named in the form.
It is important to note that individuals who receive health coverage through the Health Insurance Marketplace do not need to file Form 1095-B. Instead, they will receive Form 1095-A from the Marketplace, which will provide information about their coverage and any premium tax credits they may have received.
Purpose of Form 1095-B
The purpose of Form 1095-B is to provide proof that an individual had minimum essential health insurance coverage. The form provides information about the individual’s health coverage, including the duration of coverage and the extent of coverage. This information is used by the IRS to determine if an individual has complied with the ACA mandate to have MEC coverage.
Form 1095-B is typically provided by insurance companies, employers, or government agencies that provide health coverage. The form is sent to the individual who is covered by the insurance plan, as well as to the IRS. It is important to note that not all individuals will receive a Form 1095-B, as it is only required for those who had minimum essential coverage for at least one month during the tax year.
It is important to keep Form 1095-B with your tax records, as it may be needed when filing your tax return. If you did not have minimum essential coverage for the entire year, you may be subject to a penalty. However, there are certain exemptions that may apply, such as financial hardship or certain life events, such as a change in employment or marital status.
Key Elements of Form 1095-B
The Form 1095-B contains information about who is covered, when, and for how long. It lists the name, address, and taxpayer identification number of the policyholder and the covered individuals. It may also include additional information about the coverage, such as the premium costs paid by the policyholder, any employer contributions, and any penalties imposed for non-compliance with the ACA.
It is important to note that not all individuals will receive a Form 1095-B. Only those who were enrolled in a health insurance plan that was not provided by their employer, or who were enrolled in a government-sponsored health insurance program such as Medicaid, will receive this form. If you received a Form 1095-B, it is important to keep it for your records and to use it when filing your taxes.
Understanding the Information on Form 1095-B
It’s important to understand the information on Form 1095-B to make sure it’s accurate. For instance, you should ensure your name, tax identification number, and address are correctly listed. You should also check the information on coverage and ensure that it matches your health insurance information.
Another important aspect to consider when reviewing Form 1095-B is the section on dependents. If you have dependents listed on your health insurance plan, make sure their names and social security numbers are accurately reflected on the form. This is crucial to avoid any discrepancies or issues when filing your taxes.
Additionally, it’s important to understand the codes listed on Form 1095-B. These codes indicate the type of coverage you had during the year, such as employer-sponsored coverage or coverage through the marketplace. Understanding these codes can help you determine if you qualify for certain tax credits or exemptions.
How to Get a Copy of Form 1095-B
A copy of your Form 1095-B will be mailed to you by your insurance provider. If you haven’t received it yet, contact your provider to request a copy. Keep in mind that you don’t need to wait for the form to file your taxes. The information on the form can be obtained through your insurance provider or an online account if they offer one.
It’s important to note that not everyone will receive a Form 1095-B. This form is only provided to individuals who had minimum essential health coverage for at least one month during the previous year. If you did not have health coverage, you will not receive this form and may be subject to a penalty on your tax return. However, there are some exemptions available for those who were unable to obtain coverage or experienced certain life events.
Filing Deadlines for Form 1095-B
The deadline for filing Form 1095-B with the IRS is February 28th or March 31st if filing electronically. Providers must also provide a copy to the individual identified in the form by January 31st of the year following the calendar year of the coverage.
It is important to note that failure to file Form 1095-B or provide a copy to the individual identified in the form by the respective deadlines may result in penalties. The penalty for failure to file can be up to $270 per form, with a maximum penalty of $3,275,500 per year for small businesses. For larger businesses, the maximum penalty can be up to $10,000,000 per year. It is crucial for providers to ensure that they meet the filing deadlines to avoid any potential penalties.
Common Mistakes to Avoid When Filing Form 1095-B
When filing Form 1095-B, make sure to avoid common mistakes such as misreporting the duration of coverage or failing to update the information on the form as necessary. Also, if there are inconsistencies between your Form 1095-B and your tax return, it may trigger an audit by the IRS.
Another common mistake to avoid when filing Form 1095-B is failing to provide accurate information about the covered individuals. This includes their full names, social security numbers, and dates of birth. Providing incorrect or incomplete information can lead to delays in processing your form and may result in penalties.
It is also important to note that if you are an employer or insurance provider, you must provide Form 1095-B to all covered individuals by January 31st of the year following the coverage year. Failure to do so can result in penalties. Additionally, if you are an individual who did not receive a Form 1095-B, you should contact your employer or insurance provider to request a copy.
Penalties for Not Filing or Inaccurate Filing of Form 1095-B
Providers who do not file or inaccurately file Form 1095-B may face penalties. The penalties can range between $50 and $260 per return, for a maximum of $3,392,000 each year. It’s important to ensure that the form is filed accurately and timely.
Additionally, failure to file Form 1095-B can result in penalties for individuals who are required to report their health coverage on their tax returns. The penalty for not reporting can be up to $695 per adult and $347.50 per child, with a maximum penalty of $2,085 per family or 2.5% of household income, whichever is greater.
It’s also important to note that inaccurate filing of Form 1095-B can result in confusion for individuals who rely on the form to determine their eligibility for premium tax credits. Inaccurate information can lead to incorrect calculations and potentially result in individuals receiving too much or too little financial assistance for their health insurance premiums.
Differences Between Forms 1094 and 1095
Form 1094 is used to summarize information from Form 1095. Form 1094 is required to be submitted by the provider of coverage to the IRS along with copies of the Form 1095-B provided to the covered individuals. Form 1094 provides the IRS with an overview of all Forms 1095-B that the provider issued and helps to ensure that the provider’s submissions are accurate and consistent with the individual forms that were provided.
On the other hand, Form 1095 is used to report information about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment. This form is also used to report information about individuals who are exempt from the individual shared responsibility payment because of a hardship or other qualifying reason. Form 1095 is provided to the covered individuals and is also submitted to the IRS by the provider of coverage along with Form 1094.
How to File Form 1095-B Electronically
To file Form 1095-B electronically, the IRS requires the use of the ACA Information Returns (AIR) Program system. Before filing electronically, providers must first obtain a Transmitter Control Code (TCC) and submit a registration form with the IRS. The form can only be filed electronically by approved software providers or by the provider itself if it develops Transmission Software that meets IRS requirements.
It is important to note that the deadline for filing Form 1095-B electronically is March 31st of the year following the reporting year. Failure to file on time can result in penalties and fines. Additionally, providers must ensure that all information reported on the form is accurate and complete, as errors can also result in penalties.
Providers can also choose to file Form 1095-B on paper, but this option is only available for those with fewer than 250 forms to file. Paper forms must be mailed to the IRS along with a transmittal form, and the deadline for filing is February 28th of the year following the reporting year.
Tips for Successfully Filing Your Form 1095-B
It’s important to file your Form 1095-B on time and to ensure that the information on the form is accurate. Make sure to verify your name and tax identification numbers, the duration of your coverage, and the premium costs. Update the information as necessary throughout the year to ensure it remains current and accurate.
In conclusion, Form 1095-B is a health coverage reporting form that documents proof of minimum essential health insurance coverage. Providers of coverage must file this form with the IRS and provide a copy to the covered individual. To avoid penalties, providers must file the form accurately and by the filing deadline.
It’s important to note that if you have multiple sources of health coverage throughout the year, you may receive multiple Form 1095-Bs. Make sure to keep all of these forms for your records and provide them to your tax preparer when filing your taxes. Additionally, if you have any questions or concerns about your Form 1095-B, don’t hesitate to reach out to your health insurance provider or the IRS for assistance.