Posted on: 2/1/16
New Obamacare tax form is one for the files
Form 1095 verifies that person met Obamacare health coverage mandate
By Claire Hughes
Posted to TimesUnion.com 6:39 am, Monday, February 1, 2016
There's a new tax form coming to your mailbox — for some, it has already arrived — courtesy of Obamacare.
Here's the most important thing to know about Form 1095, area experts said: You should keep it with your tax records once you get it, but you don't need to wait for it to arrive in order to file your taxes. At least not this year.
The form is a new requirement under the Affordable Care Act for employers, insurance companies and state-run insurance exchanges to provide Americans with independent verification that they met the law's mandate to carry health insurance.
Initially, it was intended to arrive at the same time as your W-2s, which this year are due from your employer by Feb. 1. A deadline extension to March 31, however, prompted regulators to permit taxpayers to file without the 1095, making 2015 another year in which state and federal tax agencies will rely on Americans to be honest about their coverage, according toThomas Flynn, a principal in the Rochester office of the benefits company Mercer.
"The government has given everyone an OK to basically self-report again," Flynn said.
The deadline extension came about because some of the information required on Form 1095 has not previously been collected by payroll departments, said John Millet, president of Bouchey & Clarke Benefits Inc. in Troy. The form, for instance, must show not only an employee's health coverage, but also the lowest-cost individual plan that the company offered.
"That data is not typically saved in payroll systems," Millet said.
Form 1095 comes in A, B and C varieties. Form 1095-A, from the state, is for individuals who purchased insurance through NY State of Health, the online marketplace established by the state in October 2013. Form 1095-B comes directly from the insurance carrier that provides coverage, and Form 1095-C from large employers that are required to provide coverage under the law, which is known as Obamacare.
Some employees will receive both 1095-B from an insurance company and 1095-C from their employer, Millet said.
The important thing to do is hang on to it, in case you're one of the Americans to be audited by the Internal Revenue Service, experts said.
If you didn't have health insurance in 2015, the penalties this year have increased enough for most families to feel the difference, said Jim Amell, a director at Marvin and Co., a Latham-based accounting firm. The penalty is the greater of 2 percent of household income; or $325 per adult and $162 per child, capped at $975 per family.
The federal law's mandate for most Americans to carry health insurance went into effect in 2014. Despite publicity surrounding the law, some of Marvin and Co.'s clients were surprised last year that those penalties, though smaller a year ago, ate up the refund they expected, Amell said.
That penalty increases even more for those without health insurance in 2016.
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