The Affordable Care Act(ACA) requires most U.S. citizens to have health coverage that meets a government standard — known as minimum essential coverage — or be subject to a potential tax penalty.
This requirement is sometimes called the individual mandate. However, the revised U.S. tax code reduced the penalty to zero.
Employers, insurers, and government agencies are still required by the ACA to annually report to the IRS the minimum essential coverage they provide for all enrolled individuals. They are also required to provide reports to subscribers using IRS Form 1095.
Starting in January, health plan subscribers will get one or more 1095 tax forms for the previous tax year, depending on their plan.
The forms apply to everyone with health coverage, except those who purchased a catastrophic plan through a health insurance marketplace such as Covered California. The form they’ll receive depends on the type of health plan they have:
Type of plan
Individual and family through a marketplace
Individual and family direct from carrier
Small group (50 or fewer employees)
Fully insured large group (more than 50 employees)
1095-B and 1095-C
Self-funded large group (more than 50 employees)
California individual mandate for 2020 tax year
Starting on January 1, 2020, California residents must have qualifying health coverage for themselves, their spouses or domestic partners, and their dependents for each month.
Unless they qualify for an exemption, California residents could face a financial penalty of $695 or more when they file their 2020 state income tax returns, starting in 2021. The penalty for a dependent child is half of what it would be for an adult.
This law does not change Kaiser Permanente's Large Group special open enrollment guidelines.
Filing tax returns
When your clients’ employees fill out their tax returns, they should report any federal financial assistance they received toward health coverage. Additional tax forms will determine if the taxpayer receives a credit or owes payment. Subscribers will need to file Form 8962 to claim the premium tax credit or if advance payments were made to Kaiser Permanente.
Subscribers may have to pay a tax penalty if they:
- had a coverage gap lasting more than 3 months
- had more than one coverage gap in the same tax year
- can’t claim an exemption
Subscribers may receive corrected forms, so it’s important to use the most current forms to ensure accuracy of information. Also note that not filing a return could affect a subscriber’s eligibility for federal assistance.
Review our annual reporting requirements for the ACA fact sheet and minimum essential coverage Q&A overview for more information or see below for more details on each form.
1095-A, Health Insurance Marketplace Statement
- For subscribers in plans purchased through a marketplace only. Excluding those who purchased a catastrophic plan.
- The marketplace will mail out 1095-A forms starting in January.
- If a subscriber has questions about their form or need a corrected form, they need to contact the marketplace.
- Reconciles advance premium tax credit to verify income and eligibility for assistance.
- Needed to complete IRS form 8962.
- The 1095-A requires the subscriber to file a 1040 tax form rather than a 1040EZ.
- Lists all dependents along with the subscriber.
- Lists coverage periods.
- Subscribers with multiple plans will get separate forms for each plan. Nondependent children may get their own 1095-A.
1095-B, Health Coverage
- For subscribers who purchased individual and family plans directly from Kaiser Permanente, including Charitable Hospital Coverage. Also for fully insured small and large group subscribers.
- 1095-B forms will be mailed by Kaiser Permanente in January.
- Medicare, Medi-Cal, or Children’s Health Insurance Program subscribers receive their forms from the respective government agency.
- Kaiser Permanente subscribers will also get a cover letter that explains:
- what 1095-B is and why they’re getting it
- what they need to do
- contact information for replacement forms
1095-C, Employer-Provided Health Insurance Offer and Coverage
• For employees in large group plans who were eligible for benefits at least one month during the tax year.
• Mailed by the end of March by the employer or plan sponsor.
• Employers who self-fund must also report which employees and dependents are covered.
• 1095-C identifies:
o Employee and employer
o Months during the year the employee was offered group coverage
o Cost of the cheapest monthly premium the employee could have paid under the plan
o Months of coverage in which the employee and/or dependents were enrolled in a self-funded plan
• If subscribers had benefits-eligible jobs with more than one employer during the same tax year, they’ll get a separate 1095-C from each employer.
• If subscribers weren’t eligible for benefits but averaged 30 or more hours per week in at least one calendar month during the tax year, they should get a 1095-C.
• Subscribers and dependents covered through a self-funded plan will need to fill out Part 3 of 1095-C to show months of coverage.
• Subscribers in fully insured large group coverage will get both 1095-C from their employer and 1095-B from Kaiser Permanente:
o 1095-C tells subscribers the months of the previous year they were offered coverage by their employer
o 1095-B tells subscribers the months of the previous year they had coverage in a fully insured plan issued by Kaiser Permanente (including Kaiser Permanente Insurance Company)
• Subscribers in self-funded large group coverage will only get a 1095-C, sent from their employer.
• Those who waived coverage will get a 1095-C from their employer showing they were offered coverage.
- For questions about 1095-A, visit Covered California or call 800-300-1506.
- For 1095-A duplicate forms, the subscriber must contact the marketplace.
- For questions about 1095-B, contact Kaiser Permanente Member Services at 844-477-0450.
- For questions about 1095-C, subscribers should ask the employer.
- For more info on 1095-B from Kaiser Permanente, visit kp.org/proofofcoverage .
- For more info on 1095-B from a government agency, visit the appropriate agency website.
- Registered members can download duplicate or receive electronic forms at kp.org/proofofcoverage .
- For tax information, visit IRS.Gov/aca or call the IRS at 800-829-1040.
- For information on tax exemptions, visit healthcare.gov .