Home > Personal Finance > What Is the 1095-B & Why Did I Get It?

Comments 0 Comments

This year, you may have received a tax form you haven’t seen before: the 1095-B. It’s a form sent by your health insurer or employer that shows you had the minimum health insurance needed to avoid a tax penalty during the tax year. (In short, it’s an Obamacare thing.) You could also receive a similar form, the 1095-C, if you work for a company with more than 50 employees. You might actually receive both or multiple forms, depending on your insurance setup and employment situation throughout the tax year.

If that seems confusing, relax. You don’t even need these forms to file your taxes.

“You just need to check a box that says you had health coverage,” said Debra Hammer, a senior communications manager with TurboTax. “You most likely will receive a form, but it’s not required.”

If you didn’t have health coverage for the full year and don’t qualify for an exemption, like financial hardship or gaps in coverage for less than 3 months, you may need to pay a penalty. Tax software should help you calculate that penalty, and if you’re going the pen-and-paper route for tax preparation, you can find information about the penalties on HealthCare.gov.

“The only real problem with the 1095-B is that people are afraid that if they don’t have one that they cannot file their tax returns until that get the form when in reality, most of the time the information about health insurance is on their W-2 coded DD in box 12,” wrote Bill Farmer, an Enrolled Agent with HTI Tax Service, in an email. “Another dead giveaway that a person has had health insurance is that they have a code W in box 12 which indicates that they have a Health Savings Account.”

Even if you get a 1095-B or 1095-C, it’s quite likely you won’t need to do anything with them other than file them away with the rest of your tax paperwork. The extent of your Obamacare-related tax activities may be limited to checking that single box indicating you had health insurance for the year.

But not everyone has it so easy. There’s the 1095-A, which has been around for two years and goes to people who had coverage through the health insurance marketplace. It’s required to reconcile the insurance premium credits you may have received and what you really qualify for, based on the difference in your actual income and the estimated income you used when applying for health coverage — it determines if you received too little or too much of a health care subsidy and will affect your tax refund or tax bill.

“Where the whole thing starts getting hairy is when you have an A-B or an A-C combination — the person got a credit part of the year and had company-provided insurance part of the year,” Farmer said. It’s common for such taxpayers to have to repay the credits they received, he added.

It can be understandably stressful to end up owing taxes you didn’t expect to have to pay, but figuring out a way to cover that bill is important. You could pay your taxes with a credit card, though there are fees associated with that option, or you could take out a personal loan if you need help. You could also work out a payment plan with the IRS. Not paying isn’t a great option, because it can eventually get more expensive with fees and interest, not to mention the potential impact on your credit score.

Whether or not you’re fretting over 1095s, it’s probably a good idea to started filing those tax returns, if you haven’t already. Either you’ll get your refund sooner or have more time to ask questions and figure out how to tackle the tax bill you need to pay by April 15.

More on Income Tax:

Image: dolgachov

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team