A new tax form has been implemented by the Internal Revenue Service. Called the 1095-C form, it requires employees to verify they have health insurance.
Integrated into Affordable Care Act legislation, it requires “Applicable Large Employers” (organizations with 50 or more employees) to provide employees with additional paperwork for tax-filing purposes.
“It’s a pretty confusing thing,” said Greg Homesley, of Homesley Wealth Management. “The biggest problem is that the IRS came out so late with the form and what was going to be required to be reported. Businesses weren’t prepared for it.”
“The IRS moved the deadlines to March 31 from January 31. And even then, I believe there’s going to be a lot of errors, a lot of misunderstandings on how to report things, and what needs to be reported. It’s going to be a very difficult year,” he added.
“With the new regulations with Obamacare [Affordable Care Act], one of the questions that we have to ask is ‘Were you insured this past year?’ said Michael Medina, Manager at Angela Hightower Income Tax Service. “The 1095 essentially is from your employer to you, and it tells us what coverage you had, what months you had it, if you had it all year, if you didn’t have it.”
Medina said individuals who have already filed taxes prior to receiving 1095-C form in the mail would likely not endure additional consequences.
“All it does is say whether you had health insurance or not, and what months you had it. So if you’ve already filed your taxes, as long as you answered the questions correctly, regarding your own health insurance, you’ll be okay,” he explained. “Now, for some reason if you did not answer the questions correctly, you can always file an amendment to your tax return to get it corrected, and get it filed correctly.”
“You may have some other exemption. There’s a whole host of exemptions that you can qualify for,” Homesley added. “What [the IRS] will accomplish, is they’ll get the employers and employees used to the idea of reporting this and capturing the information. So, they can do better next year. Next year they’ll probably try to actually count where they’ll try to match those records with the W-2s.
To read more from the IRS about Form 1095-C, click here.
