Editors' pick: Originally published Jan. 31.
Even though the Affordable Care Act's future seems very much up in the air in the early days of the Trump administration, tax filers shouldn't ignore health care insurance and their tax filing responsibilities this year.
In fact, many U.S. workers will receive a tax form that directly addresses their health care insurance situation, and likely, most won't know how to handle the form's filing request properly.
The document is IRS form 1095-C, and if you have employer-based health care insurance, you may need to complete the form to Uncle Sam's specifications. "The problem is that some people are unsure why they're receiving the form, or what to do with it," says Arthur Tacchino, a health care reform expert and chief innovation officer at SyncStream Solutions, in West Chester, Pa.
More formally known as the "Employer-Provided Health Insurance Offer and Coverage" form, 1095-C stems from an ACA mandate that requires any organization with 50 or more full-time employees (or full-time equivalents) to provide tax documentation that the employee in question is enrolled in the company's health insurance plan.
"The ACA requires that almost all Americans have healthcare coverage," notes Josh Zimmerman, owner of New York-based Westwood Tax & Consulting. "The point of the 1095-C form is this - the IRS uses the information on Form 1095-C to determine whether an employee or employer have met the healthcare coverage requirements or is required to pay a fine."
The 1095 is broken down into three components, Zimmerman explains.