Let Your Employees Know about the New Tax Reporting Forms!

Editor's note: If you appreciate being able to read posts like this one, and want to ensure ANC's ability to provide more content like this, please click here to demonstrate your support and become a paid subscriber.

I have multiple letters after my name and often people do not understand them. The CEBS (Certified Employee Benefit Specialist) is considered the premier designation in the employee benefits field. This type of education demonstrates a commitment to the highest professional standards in the industry. As an extension of this continuing education, I am a member of the International Society of Employee Benefit Specialist (ISCEBS).

There are “chat rooms” and then there are “chat rooms”. My choice of chat rooms happens to be through my professional organizations. We share a great deal of technical information and present issues to the group for comments and “second opinions. These relationships augment all the other resources I provide to support my clients, including attorneys that specialize in benefits and the documents they draft for use by my clients.

I tell the reader this as a way to establish my credentials in the field, but also to introduce the following prototype document. It was prepared by one of our members, Michael Appaneal, CEBS.

Soon businesses will be facing the first year of tax reporting for benefits. Employees will likely be confused by all the new forms. I believe most employers will find it useful. Enjoy!

New Forms for Your 2015 Federal Income Tax Filing

When the Affordable Care Act (also known as health reform, or the ACA for short) was passed, with it came with a host of reporting requirements for employers and health insurance companies. Beginning early next year, around the time you receive your Form W-2, you may receive one or more new tax forms related to health insurance you may have had or were offered in 2015.

Please keep in mind that while we know what form or forms we will be sending OR we and our insurance company will be sending, you may receive others if you worked for another employer or we changed our insurance company earlier in the year. Therefore, we will explain the form (or forms) you might receive, why you might receive them, and what you will do with the information they contain.

Form 1095-B

Form 1095-B

Why will I receive it?

If you receive this form, it is because you were:

  • An employee who received health coverage from an employer-provided, fully-insured plan, a union-based plan, or certain other plans (including Medicare or Medicaid) for at least a day in 2015.

Or

  • A nonemployee (for example, a retiree, contractor, or COBRA recipient) who received health coverage under a type of employer-provided plan called a “self-insured plan” (these are plans under which claims are paid from employer funds and, typically, employee contributions) for at least a day in 2015.

How will I use this information?

You or your tax preparer will enter information contained on this form on your federal tax return for 2015 to demonstrate that you satisfied the ACA’s obligation to have health insurance.

The IRS will receive copies of any Forms 1095-B or 1095-C provided to you so it can verify the health insurance information you report on your tax return.

Form 1095-C

Form 1095-C

If you receive this form, it is because you:

  • Were considered “full time” for ACA purposes for at least part of 2015.

Or

  • Were covered for at least a day in 2015 under an employer-provided self-insured plan.

Form 1095-C, Parts I and II

If you were considered full-time for ACA purposes for at least part of 2015, these two parts of
Form 1095-C will be completed on your behalf, regardless of the type of health plan under which you were covered, or regardless of whether you had or were offered any coverage at all.

Form 1095-C, Part III

If your health insurance was through an employer-provided, self-insured plan, Part III will be completed on your behalf. (If your employer was fully-insured, this part will be left blank, and you will receive a 1095-B.)

How will I use this information?

  • Parts I and II: You will not need to do anything with this information other than keep it with your other tax records.
  • Part III: If it is completed, you will use this information to prepare your federal tax return for 2015 to demonstrate you satisfied the ACA’s obligation to have medical insurance.
Margaret R. Beck
Margaret Beck  CLU, ChFC, CEBS started her insurance practice in Redding in 1978. As an insurance broker/consultant,  she represents businesses and individuals as their advocate.  She assists in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed. All information in her column is provided to the best of her knowledge, subject to final regulation by the respective agencies. Questions to be answered in this column can be submitted to info@insuranceredding.com. Beck's column is also published in the Redding Record Searchlight.
Comment Policy: We welcome your comments, with some caveats: Please keep your comments positive and civilized. If your comment is critical, please make it constructive. If your comment is rude, we will delete it. If you are constantly negative or a general pest, troll, or hater, we will ban you from the site forever. The definition of terms is left solely up to us. Comments are disabled on articles older than 90 days. Thank you. Carry on.

1 Response

  1. Avatar LovesToEat says:

    Thank you so very much for bringing this new tax reporting information to our attention.