What is Form 1095?

When Congress passed the Affordable Care Act (ACA) in 2010, it created new reporting requirements for health insurance. One of these responsibilities for employers and insurers is completing Form 1095 to detail the health insurance coverage they provide to employees.

But, as a business owner, do you know which version of the form you should file? While you should consult with a tax professional if you have specific questions about filing one for your organization, this blog post contains general information about Form 1095 to help you get started with filling one out.

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What is Form 1095?

Form 1095 is a set of tax documents employers and health insurers use to report information about health coverage on an individual’s income tax return. They essentially serve as proof of insurance for tax returns. There document has three variations: Forms 1095-A, 1095-B, and 1095-C.

These forms ensure that individuals receive the premium tax credit they’re eligible for and assist the IRS in verifying if they have adequate employer-sponsored coverage. This helps the IRS ensure compliance with the employer mandate and its associated penalties.

Types of Form 1095 and when to use them

There are three main types of Form 1095 that individuals, employers, and insurers may use to report their healthcare coverage.

The table below summarizes which plans require each type of form.

Plan type	Who provides the form	Form
Individual or family coverage from the Health Insurance Marketplace	State or federal exchange	1095-A
Group health insurance, Marketplace plans, and other employer-sponsored group health benefits	Employers with fewer than 50 full-time equivalent employees (FTEs) and insurance companies	1095-B
Group health plans and other employer-sponsored group health benefits	Employers with 50 or more FTEs	1095-C
Medicare or Medicaid	Department of Health and Human Services (DHHS)	1095-B
Children’s Health Insurance Program (CHIP)	Department of Health and Human Services (DHHS)	1095-B

Form 1095-A

Insurance companies participating on the Health Insurance Marketplace and state-based exchanges provide Form 1095-A¹, also known as the Health Insurance Marketplace Statement, to individuals with qualified health plans from the public exchanges.

This form contains vital information about an individual’s health coverage.

It includes details such as:

The individual’s name, Social Security number, date of birth, and address
The individual’s spouse’s name, if applicable
The names, SSNs, dates of birth, and coverage start and end dates for any other covered individuals (dependents)
The monthly enrollment premiums for each month
The cost of the second lowest-cost silver plan premium for each month
Any monthly premium tax credits they were entitled to, and if they used advance premium tax credits to pay for their premiums.

Individuals then use this form to complete their income tax return and reconcile any tax credit payments. Once individuals have their 1095-A and know the second lowest-cost silver plan premium, they can fill out Form 8962 for their premium tax credit.

Only individuals with qualifying Marketplace coverage at any point during the year require a Form 1095-A. Insurers provide the form even if the individual has no premium tax credits. If the individual has a catastrophic health plan, they don’t receive the form.

Form 1095-B

Employers with fewer than 50 full-time equivalent employees (FTEs) that offer health benefits to their employees and health insurers provide this form² to employees or individuals. This form provides important information about an individual’s health insurance coverage.

Details include the following:

The individual’s name, SSN, and address
Letter code for the origin of the health coverage
- A: Small Business Health Options Program (SHOP) marketplace
- B: Employer-sponsored coverage
- C: Government-sponsored program
- D: Individual market insurance
- E: Multiemployer plan
- F: Other minimum essential coverage (MEC)
- G: Individual coverage health reimbursement arrangement (ICHRA)
The employer’s name, EIN, and address if this is for employer-sponsored coverage
Insurer’s name, EIN, contact information, and address
The type of coverage an individual had
If the plan covered any dependents during the year
The period of coverage

Individuals then use this form to verify that they had minimum essential coverage (MEC) on their tax returns to comply with the individual mandate. As of 2019, the IRS no longer imposes a penalty for failing to meet the mandate.

As an employer, you must send each of your employees Form 1095-B by the annual deadline on January 31. You’ll also need to submit Form 1094-B to the IRS by February 28 if you paper file or March 31 (April 1 for 2024) if you file electronically. This form provides a summary of all your 1095s.

Form 1095-C

As a result of the employer mandate, employers with 50 or more FTEs must offer health coverage to at least 95% of their full-time employees. Known as applicable large employers (ALEs), these employers use Form 1095-C³ to show the coverage they offered to their employees.

It includes key details about your health insurance plan, including information on the employee’s participation and eligibility.

You include the following details on the form:

The employee’s name, SSN, and address
Your organization’s name, EIN, address, and contact information
The employee’s age as of January 1
The starting month for your plan
The type of coverage you offered to an employee (using codes)
The employee’s share of the monthly premium
Section 4980H safe harbor and other relief codes
The employee’s ZIP code for each month
Any other covered individuals and the months your plan covered them

You must include one of the following codes for each month on the form to explain the type of coverage you offered your employees and how you determined affordability.

Code	Code description
1A	You offered MEC that provides minimum value (MV) to the employee with a required employee contribution that’s less than or equal to 9.02% of their income, using the federal poverty line (FPL), for 2025 (8.39% for 2024). You also offered MEC to the employee’s spouse and dependents.
1B	You offered a benefit with MEC and MV to the employee. You did not offer MEC to their spouse or dependents.
1C	Same as above for the employee. You only offered MEC to the employee’s dependents, not their spouse.
1D	Same as above for the employee. You only offered MEC to the employee’s spouse but not their dependents.
1E	Same as above for the employee. You offered MEC to the employee’s dependents and spouse.
1F	You offered a plan with MEC but not MV.
1G	The employee wasn’t full-time for any month during the calendar year. Still, they enrolled in self-only employer-sponsored coverage for one or more months.
1H	You didn’t offer any coverage or only offered non-MEC plans to the employee.
1J	You offered MEC and MV to the employee. You conditionally offered MEC to their spouse but not their dependents.
1K	You offered MEC and MV to the employee, MEC to their dependents, and conditionally offered MEC to their spouse.

You must provide this form to all full-time employees who’ve worked at your organization for at least one month by January 31.

If you’re an ALE that offers an ICHRA, you must also use Form 1095-C. The IRS added new codes to the form specifically for the ICHRA in 2020 to explain how you determined affordability for the benefit.

The table below includes ICHRA-specific codes for the form.

ICHRA-specific code	Code description
1L	You offered an ICHRA to the employee and determined affordability using their primary residence ZIP code.
1M	You offered an ICHRA to the employee and their dependents (but not spouse) and determined affordability by their primary residence ZIP code.
1N	You offered an ICHRA to the employee, their spouse, and their dependents. You determined affordability using their primary residence ZIP code.
1O	You offered an ICHRA to the employee and determined affordability using their primary employment site ZIP code affordability safe harbor.
1P	You offered an ICHRA to the employee and their dependents (but not spouse) and determined affordability by using their primary employment site ZIP code affordability safe harbor.
1Q	You offered an ICHRA to the employee, their spouse, and their dependents and determined affordability by using their primary employment site ZIP code affordability safe harbor.
1R	You offered an ICHRA that isn’t affordable.
1S	You offered an ICHRA, and the employee isn’t a full-time employee.
1T	You offered an ICHRA to the employee and their spouse, but not dependents, and determined affordability by their primary residence ZIP code.
1U	You offered an ICHRA to the employee and their spouse, but not dependents, and determined affordability using their primary employment site ZIP code affordability safe harbor.

You’ll also submit Form 1094-C to the IRS by February 28 if you file by paper or March 31 (April 1 for 2024) if you file electronically. This form provides a summary of your 1095-Cs. You must include all your full-time employees for the tax year and any part-time employees enrolled in your benefits.

What are the penalties for not filing Form 1095?

Failing to comply with the filing requirements for Form 1095 can result in penalties for employers and insurance providers.

According to IRS Sections 6721 and 6722, the IRS can fine ALEs⁴ (those with 50 or more FTEs) for non-compliance under the ACA.

Organization size (for ALEs)	30 or fewer days late	31 or more days late, up to August 1	After August 1
Businesses with fewer than $5 million in annual gross receipts	$60 per late return up to $220,500 (2024)	$120 per late return up to $630,500 (2024)	$310 per late return up to $1,261,000 (2024)
Businesses with $5 million or more in annual gross receipts	$60 per late return up to $630,500 (2024)	$120 per late return up to $1,891,500 (2024)	$310 per late return up to $3,783,000 (2024)

The IRS doubles penalties for organizations that never furnish these forms to their employees.

Conclusion

Form 1095 provides your employees with everything they need to complete questions about their health coverage on their federal tax returns. With this information, the IRS can ensure compliance with the ACA.

Employers offering health benefits like group health insurance or an ICHRA must furnish either the 1095-B or 1095-C forms to their employees and send a summary of these forms to the IRS. If you offer other types of health reimbursement arrangements (HRAs), such as a qualified small employer HRA (QSEHRA), you don’t need to file the form.

This article is intended to provide general information. Contact a trusted tax professional if you need help with your tax-related questions.

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Chase Charaba

Chase Charaba is the Content Marketing Manager at PeopleKeep. He joined PeopleKeep as a content marketing specialist in February 2022. As someone who has written about HRAs for almost three years and personally used both a QSEHRA and ICHRA, he has a deep understanding of the benefits and how they can help small employers and their employees. Chase has written more than 350 blog posts for various companies and projects throughout his career. He’s worked with digital marketing agencies and in-house marketing teams. He’s also an aspiring fiction author, landscape photographer, and small business owner.