What is a 1095-C?

Provided by the Affordable Care Act (ACA), the 1095-C is an informational document that must be supplied to employees who were offered health insurance coverage by their employer. It contains important information about the health coverage that was available to the employee, such as whether or not it was a part of an eligible small business health reimbursement arrangement (HRAs). Employers must file these document with the Internal Revenue Service (IRS) when the tax filing deadline comes around.

Why is the 1095-C Important?

Individuals are required to have Health Insurance or face taxes penalties for not having adequate coverage. The 1095-C verifies that an individual had access to quality health coverage through an employer-sponsored health plan and whether or not they enrolled. Employees need to have access to this document to prove they had coverage if they are audited by the IRS. Employers also use this document to ensure they are in compliance with the ACA.

How to Read the 1095-C?

The 1095-C is easy to read. It has five main sections. The first section contains information about the employer, such as their name, address, and federal tax identification number. The second section contains information about the offer of coverage, such as the plan name and details, the minimum essential coverage and the periods in which the coverage was offered. The third section includes information about the employee, such as their name, Social Security number, and the period of coverage. The fourth section is used to report any additional information, such as the New Hire option or termination of coverage. Finally, the fifth section contains statement codes that are used to note specific information about each form.

The 1095-C document lets both employers and employees have important information about the health plan that is offered. It is a useful document for individuals who need to prove to the IRS that they had access to quality health coverage. It also ensures that employers are in compliance with the Affordable Care Act and that they are providing required information to the IRS.