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What is Form 1095-C?

1095-C is one of the tax forms associated with health insurance, and is specific to large employers (defined as having 50 or more full-time employees). Employers of this size are required to send this form to all eligible employees as documentation of the health benefits that were offered that year. You should receive one of these forms even if you opted to get health insurance through another source or to go without it. Form 1095-C will typically arrive in January or early February each year. If you are expecting a form but do not receive it, contact your employer.

The form contains important information for your tax return, such as the name of your employer, the months during the past calendar year that you were eligible for coverage through that employer, how many members of your household were covered and for how long, and the cost of the cheapest premium that you could have paid under the employer’s plan. This information will be reported to the IRS at the same time that it is sent to you – there is no need to send in this form when you complete your taxes. However, it is still an official document and should be kept with your other tax records.

Form 1095-C will be especially important to those who were offered coverage by their employer but decided to sign up via the exchange instead, particularly where premium subsidies (also called premium tax credits) are involved. Because one’s eligibility for such subsidies is based on the “affordability” of your employer’s sponsored coverage relative to your income, the information presented on form 1095-C – such as the size of the premiums one would have paid – can be useful in proving that you were indeed eligible.

While most employers large enough to be sending out Form 1095-C will offer at least some form of health coverage (lest they incur a penalty), some may not have health benefits available to employees. This will also be indicated on the form if applicable, and can be further useful in proving that you did not have sufficient coverage available through work when proving your eligibility for subsidies.

You may receive other, similar forms around the same time of year. For example, if you were eligible for coverage through an employer but bought an individual plan from the exchange instead, you will receive a 1095-A in addition to your 1095-C. Most people will only have to deal with one or two forms in any given year.

Seek out a tax advisor or other expert if you have additional questions about how health insurance relates to taxes.

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