Form 1095-B

What is ACA Form 1095-B: Health Coverage?

Form 1095-B is a tax document used in the United States that provides information about an individual's health insurance coverage. Insurance companies, self-insured employers, and other parties that provide minimum essential health coverage are required to file this form. It is used to verify on tax returns that an individual has the minimum essential coverage as required by the Affordable Care Act (ACA). While taxpayers are not generally required to send Form 1095-B to the IRS when they file, they should keep this document with their tax records as proof of coverage.

About Form 1095-B

Form 1095-B is part of the ACA reporting requirements in the United States. It provides information about an individual's health care coverage during the previous tax year.

The form is typically issued by health insurance providers, including insurance companies, self-insured employers, and other entities that provide minimum essential coverage. Form 1095-B contains details such as the type of coverage, the months covered, and the individuals covered under the policy. The information from the form helps the IRS ensure that people are maintaining the required health coverage and enables them to identify those who might be liable for a penalty for not meeting the coverage standards.

Who is required to file Form 1095-B?

Form 1095-B needs to be filed by entities that provide minimum essential health coverage. This includes:

1. Insurance Companies: Health insurance providers that offer coverage through individual policies or small group plans.
2. Self-Insured Employers: Employers that provide their own health coverage to employees rather than purchasing plans from insurance companies.
3. Government Programs: Various government programs that provide health coverage, such as Medicaid and Medicare, also file this form.
4. Other Entities Providing Coverage: Other organizations that provide health coverage according to ACA requirements, including certain universities that provide coverage to students.

These entities are responsible for sending Form 1095-B to covered individuals and filing copies with the IRS. The form helps the government track compliance with the ACA's coverage mandates and supports individuals in completing their tax returns accurately.

What forms should be included when filing Form 1095-B with the IRS?

When filing Form 1095-B, the entity providing the coverage (such as an insurance company or self-insured employer) also needs to file Form 1094-B, which serves as the transmittal form for Form 1095-B. Together, Forms 1094-B and 1095-B provide comprehensive information to the IRS about individuals who have received minimum essential health coverage during the tax year, helping to ensure compliance with the Affordable Care Act (ACA) requirements.

What is Form 1094-B?

Form 1094-B is a cover sheet that includes summary information about the employer or insurer and the associated 1095-B forms. It includes details like the employer's name, Employer Identification Number (EIN), and contact information, as well as the total number of 1095-B forms being submitted.

What is the deadline to submit Form 1095-B?

For reicpients, Form 1095-B must typically be provided to the individuals covered under the policy by March 2nd of the year following the coverage year. If March 2nd falls on a weekend or holiday, the deadline may be extended to the next business day.

When filing to the IRS, the ACA deadline will depend on the method of filing:

• If filing electronically, the deadline is usually March 31st of the year following the coverage year.
• If filing on paper, the deadline is typically February 28th of the year following the coverage year.

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Why should an employer choose to E-file over paper filing?

Employers and other entities may choose to e-file Form 1095-B over paper filing for several reasons:

1. Efficiency: E-filing can be faster and more efficient. Data can be entered and submitted quickly, and the process can often be automated, saving time and resources.
2. Accuracy: E-filing systems often include built-in validation checks that help reduce errors. Corrections can be made easily, minimizing the risk of mistakes that could result in penalties.
3. Convenience: E-filing can be done at any time and from anywhere with an internet connection. It doesn't require physical materials like paper or postage, simplifying the process.
4. Confirmation and Tracking: E-filing usually provides immediate confirmation that the forms have been received by the IRS. This can be useful for record-keeping and provides assurance that the documents have been submitted successfully.
5. Compliance for Large Filers: For entities that are required to file a large number of forms (such as 10 or more), e-filing may be mandatory, making it not just a choice but a compliance issue.
6. Cost Savings: Although there might be some initial setup costs, e-filing can save on printing, mailing, and handling expenses in the long run.
7. Extended Deadlines: Sometimes, the deadline for e-filing with the IRS is later than the deadline for paper filing, providing additional flexibility.

Overall, e-filing can provide substantial benefits in terms of efficiency, accuracy, and convenience, making it an attractive option for many employers and other entities responsible for filing Form 1095-B.

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