Definition
Form 1095-B is a U.S. tax form provided by insurance companies to individuals they cover, detailing who was covered and when. It serves as proof of the minimum essential healthcare coverage for U.S. federal tax purposes. The information on this form is used by the Internal Revenue Service (IRS) to determine whether an individual or their family members fulfilled the Affordable Care Act requirements.
Phonetic
The phonetics of the keyword “Form 1095-B” would be: “F-O-R-M One Zero Nine Five – B”
Key Takeaways
<ol><li>Form 1095-B, also known as the Health Coverage Form, is a document sent by your health insurance provider that provides information about your health coverage throughout the year. It is used by the IRS to confirm whether you had minimum essential coverage during the year and therefore are not liable for any healthcare-related penalties.</li><li>It includes information such as who was covered and their social security number, the monthly breakdown of who was covered and for how long, and the name and address of your health insurance provider. It is primarily used for your records and not to be filed with your taxes, unless requested.</li><li>If you’re expecting a 1095-B but you don’t receive one, you should contact your insurance provider directly. However, you can still file your taxes without Form 1095-B, provided you can accurately report your coverage for each month.</li></ol>
Importance
Form 1095-B is an essential document in the realm of business and finance as it is used by the Internal Revenue Service (IRS) to verify an individual’s health care coverage throughout the year. Under the Affordable Care Act (ACA), also known as Obamacare, all U.S citizens and legal residents are required to maintain minimum essential health coverage. If not, they could face a penalty unless exempted. Hence, Form 1095-B is issued by health insurance providers and covers details such as whether the individual had health coverage, the individuals covered, and the period of coverage. Therefore, this data is crucial for taxpayers to accurately report their health insurance information on their tax returns and to avoid potential penalties from the IRS.
Explanation
Form 1095-B is a federal tax form that helps ascertain the level of health insurance coverage a taxpayer has; it’s often seen as proof of one’s insurance. This document is mainly issued in the United States by health insurance providers or related businesses, to both policyholders and the Internal Revenue Service (IRS). Its central purpose is to verify the taxpayer’s compliance with the Affordable Care Act (ACA) or Obamacare’s individual mandate, which requires most Americans to maintain minimum essential health coverage; ensuring the individual does not have to pay the shared responsibility payment.This form provides crucial information about the individual’s health coverage, including the type of coverage they have, the dependents enrolled under the plan, their insurance provider, and the duration of the coverage. It is essential when preparing individual tax returns, especially for those who qualify for the Premium Tax Credit. While individuals do not need to attach Form 1095-B to their tax returns, it is a necessary document to keep as a personal record to answer any health coverage-related questions that might arise while filing taxes. Hence, Form 1095-B serves a significant purpose in navigating taxpayers’ obligations under the ACA and their yearly tax return.
Examples
1. Healthcare Provider Compliance: A healthcare insurance provider such as Blue Cross Blue Shield is required to send out 1095-B forms to all its beneficiaries. This form provides information about the type of coverage they had and for how long during the last tax year. 2. Small Business Health Coverage: A small business owner who provides health care insurance for employees is an example of where Form 1095-B would be used. At the end of the year, the provider of the health insurance would send out the 1095-B forms to each employee for their personal tax purposes.3. State-Provided Health Coverage: For individuals who are covered by government provided healthcare, such as Medicaid or a state-based insurance marketplace, they would receive a 1095-B form. This form would include information about their coverage period and also act as proof of having minimum essential coverage according to the Affordable Care Act.
Frequently Asked Questions(FAQ)
What is Form 1095-B?
Form 1095-B is a tax form that reports the type of health insurance coverage you have, any dependents covered by your insurance policy, and the period of the coverage for the previous year. It is provided by insurance companies, employers that self insure, small businesses or other coverage providers.
Why do I need Form 1095-B?
Form 1095-B is primarily used to verify on your tax return that you and your dependents have at least minimum qualifying health insurance coverage.
How do I obtain Form 1095-B?
The form should be sent to you by your insurance provider. If you haven’t received it by early February, contact your provider and ask for it.
I received a Form 1095-B, but I don’t understand it. What should I do?
If you have questions about the information listed on your Form 1095-B, reach out to your insurance provider. They should be able to explain the details.
Do I need to attach Form 1095-B to my tax return when filing?
No, you do not need to submit Form 1095-B with your tax return. However, you should keep it with your tax records as it provides evidence of the coverage you had during the year.
Can the lack of Form 1095-B prevent me from filing taxes?
No, you can still file taxes. The IRS states that you don’t need to wait for your Form 1095-B to file taxes as it is not attached to your return. However, you should have information from all other tax documents that the form summarizes.
I didn’t receive Form 1095-B from my insurer. What should I do?
If you didn’t receive this form by early February, first contact your insurance provider. If they cannot provide it, consult with a tax professional for further guidance.
Is there a penalty if I don’t provide Form 1095-B information in my tax return?
The Form 1095-B verifies you met minimum health coverage requirements, so not listing this information could result in a penalty. However, the penalty for not having coverage is effectively gone starting with the 2019 tax year under the Tax Cuts and Jobs Act. It’s important to consult with a tax professional if you’re unsure.
Related Finance Terms
- Health Insurance Coverage
- Internal Revenue Service (IRS)
- Tax return
- Affordable Care Act (ACA)
- Form 1040 (U.S. Individual Income Tax Return)
