Form 1095-C: Overview & Instruction Guide

KEY TAKEAWAYS

• Form 1095-C is used to report information about an employer-sponsored health insurance plan.
• The form provides information about an individual’s coverage, as well as any changes to that coverage during the year.
• Information reported on Form 1095-C helps determine whether an individual is eligible for a premium tax credit.
• Form 1095-C is also used to report information about an employer’s offer of health insurance coverage to its employees.

What is Form 1095-C?

Form 1095-C is a tax form used to report employer-sponsored health insurance coverage. It’s filed by employers with the Internal Revenue Service (IRS).

Form 1095-C is used to report information about the health insurance coverage offered to an employee by an employer. The form helps the IRS determine whether an individual is eligible for a premium tax credit. The premium tax credit is a refundable credit that helps eligible individuals cover the premiums for their health insurance obtained through the Health Insurance Marketplace.

What is the purpose of filing Form 1095-C?

As an employer, you must file Form 1095-C if you offer health insurance coverage to your employees. An employer that sponsors a self-insured health plan, must also  file the1095-C form. 

The purpose of Form 1095-C is to provide information about the health insurance coverage offered to employees. This form is filed to determine whether you are eligible for the premium tax credit and to calculate any repayment of the premium tax credit.

Who has to file Form 1095-C?

Form 1095-C must get filed by certain employers that sponsor health insurance coverage for their employees.

Employers that have to file Form 1095-C include:

• Employers subject to the employer shared responsibility provision under the Affordable Care Act.
• Self-insured employers offering health coverage.
• Large employers that are part of a controlled group or an affiliated service group (called ALE Members).

When to file Form 1095-C?

In most cases, you need to file by February 28^th of the year following the calendar year the return is for if you file by paper. If you file electronically, you need to file by March 31^st.

Employers must provide Form 1095-C to each full-time employee by March 2, 2023, for the 2022 calendar year.

What is the impact of Form 1095-C on taxes?

Form 1095-C reports information about an employer-sponsored health insurance plan. The form is filed with the IRS and helps determine whether an individual is eligible for a premium tax credit.

The impact of Form 1095-C on taxes will depend on the individual’s situation. If an individual is eligible for a premium tax credit, the form helps calculate the amount of the credit.

If an individual is not eligible for a premium tax credit, the form will not have any impact on taxes.

Example of Form 1095-C

The Form 1095-C is an annual tax form filed by employers with the Internal Revenue Service (IRS). The form is used to report information about an employer’s health insurance coverage for their employees.

Employers that must file Form 1095-C are employers who:

1. Have 50 or more full-time employees. This includes full-time equivalent employees, on average during the previous calendar year; or
2. Are applicable large employers (ALE) as defined under the Affordable Care Act.

The Form 1095-C is required for all applicable employers. Regardless of whether they offer health insurance coverage to their employees or not. Employers who do not file the required forms may be subject to penalties.

The Form 1095-C consists of three parts:

1. Part I – Employee and Employer Information
2. Part II – Coverage Information
3. Part III – Covered Individuals

Part I of the Form 1095-C requires employers to provide information about themselves and their employees. I.E., the employer’s name, address, and Employer Identification Number (EIN). Employees’ information must also be included on this part of the form, along with their Social Security numbers.

Part II of the Form 1095-C requires employers to provide information about the actual insurance coverage they offer. This includes information about the type of coverage offered, dates of coverage, and if the employee is enrolled.

In short, the form has simple questions about employee insurance. You just need to provide an annual statement regarding your business insurance provider options.

Summary

Form 1095-C is a form used by large employers to report information about their employees’ health insurance coverage. The Form 1095-C is also used to calculate an employee’s individual shared responsibility payment, if applicable.

Written by Sandra Habiger, CPA

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.

Written by Sandra Habiger, CPA

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.