Form 1095-C is a document many taxpayers encounter during tax season, especially those employed by large organizations. As part of the Affordable Care Act’s reporting requirements, it provides essential information about health insurance coverage through an employer. Understanding its role in the tax return process can help ensure compliance and avoid issues.
Purpose of Form 1095-C
Form 1095-C informs employees about the health coverage offered by their employer, as mandated by the Affordable Care Act (ACA). Applicable large employers (ALEs)—those with 50 or more full-time equivalent employees—must issue this form to report the months an employee was covered, the type of coverage, and the cost of the lowest premium available.1Internal Revenue Service. Determining if an Employer Is an Applicable Large Employer This helps enforce the ACA’s employer mandate requiring ALEs to offer sufficient and affordable coverage to full-time employees, with non-compliance potentially resulting in penalties under Internal Revenue Code Section 4980H.2Internal Revenue Service. Employer Shared Responsibility Provisions
Who Receives Form 1095-C
Employees of ALEs, including full-time employees working at least 30 hours per week or 130 hours per month, receive Form 1095-C.3Internal Revenue Service. Identifying Full-Time Employees ALEs must also furnish it for certain individuals enrolled in an ALE’s self‑insured coverage, which can include some former employees such as retirees or individuals on COBRA continuation coverage.4Internal Revenue Service. Q&As About Employer Reporting on Forms 1094‑C and 1095‑C
Requirements for Including Form 1095-C
Form 1095-C does not need to be attached to your federal tax return, and you can file your return without waiting for it; if you had Marketplace coverage with advance payments, you should use Form 1095-A to complete Form 8962.5Internal Revenue Service. Gathering Your Health Coverage Documentation for the Tax Filing Season The federal individual shared responsibility payment (the ACA penalty) is $0 for tax year 2019 and later, so you do not report health coverage on your federal return for those years.6Internal Revenue Service. Q&As on the Individual Shared Responsibility Provision
Consequences of Omitting Form 1095-C
Although omitting Form 1095-C from your tax return does not result in penalties, failing to use its information can create discrepancies between your employer’s report to the IRS and your filing. These inconsistencies may trigger IRS inquiries, delaying return processing or refunds. While there are no direct penalties, such discrepancies can lead to audits, which are time-consuming and stressful. Cross-referencing your tax return with Form 1095-C ensures accuracy and avoids unnecessary complications.
What to Do if You Didn’t Receive It
If you haven’t received Form 1095-C, contact your employer’s human resources or benefits department to check its status. Mailing errors or delays may occur, but a direct inquiry often resolves the issue. If your employer cannot provide it, use alternative documentation such as pay stubs, insurance cards, or statements from your health insurance provider to verify your coverage. Keep records of your attempts to obtain the form and any related correspondence with your employer, as these can be helpful if the IRS raises questions about your reported health coverage.