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Coming Soon: Forms Related to ObamaCare's 'Individual Mandate'

October 14, 2015

By Wendy Pongracz

In January 2016, people who participate in health insurance plans may receive forms that could spark some questions. Here’s what to expect.

One of the provisions of the Affordable Care Act required most Americans to obtain health insurance by 2014 or pay a tax penalty. Referred to as the “individual mandate,” the provision requires health plan participants to demonstrate that they had qualifying health insurance coverage or pay a penalty on their income taxes.

In 2016, insurers and self-insured health plans must report to the participant and to the Internal Revenue Service (IRS) whether during 2015 individuals had “minimum essential coverage” that would allow them to avoid the individual mandate penalty. And, employers will have to report whether they will be tagged with the “pay or play” penalty or have provided health coverage to full-time employees that is “affordable” and provides “minimum value,” as those terms are defined in the ACA. These forms will have to be provided annually.

The health plan and the employer each will provide a form to participants covered by the plan showing this coverage information. The form looks something like a W-2. The health plan and the employer also will have to file copies of these forms with the IRS.

  1. From the health plan, the participant who was covered under the plan will receive a Form 1095-B showing that he (and his dependents) had “minimum essential coverage” in the previous year. This form contains important information that participants will need when filing their income tax returns in order to verify that they received the required coverage and do not have to pay the individual penalty. Participants should be sure to keep this form.
  2. From the employer, the participant who was offered coverage under the plan will receive a Form 1095-C showing the months his employer offered him (and his dependents) coverage and whether the coverage was “affordable” and provided “minimum value.” The participant may receive a copy of this form even if he declined the coverage, for example, if the participant declined because he enrolled in coverage under a spouse’s health plan.

Participants with questions about a Form 1095-B should contact their health plans. Those with questions about a Form 1095-C should contact their employers. And, if you have questions, please don’t hesitate to contact one of our Benefits Attorneys.

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