Know the Basics: Form 1095-B

Form 1095-B is a tax form that provides information about your health insurance coverage. The forms show the months during which you (and any of your dependents) were covered on a plan that meets the minimum essential coverage standard as defined by the Affordable Care Act (ACA). All health insurance plans through Justworks meet the minimum essential coverage standard.

What Is a 1095-B?

Form 1095-B is a tax form that provides information about your health insurance coverage. The forms show the months during which you (and any of your dependents) were covered on a plan that meets the minimum essential coverage standard as defined by the Affordable Care Act (ACA). All health insurance plans through Justworks meet the minimum essential coverage standard.

What Is a 1095-B used for?

Form 1095-B is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage. Eligibility for certain types of minimum essential coverage can affect a taxpayer's eligibility for the premium tax credit.

Minimum essential coverage includes government-sponsored programs, eligible employer-sponsored plans, individual market plans, and other coverage the Department of Health and Human Services designates as minimum essential coverage. Minimum essential coverage is described in more detail under Who Must File, later.

The forms show:

• The subscriber covered by the policy (you)

• Any dependents on the policy

• The months in which you (and your dependents) on the policy were covered

Who Receives Form 1095-B?

If you had health insurance through your employer or independently during any part of 2020, you should receive Form 1095-B from the insurance carrier. Only you, as the subscriber, will receive Forms 1095-B for your coverage. Any dependents that need to furnish proof of health insurance coverage may request a copy of the form from the subscriber.

Applicable Large Employers: What Are They?

An Applicable Large Employer (ALE) is a company that has 50 full-time employees or equivalents. According to the Affordable Care Act, a full-time employee is someone that works 30 hours a week.

However, to prevent companies from only hiring part-time employees, ACA also has something called the full-time equivalent. The government calculates the hours each employee, part-time and full-time, works and then divides that by 30 hours.

For example, if you have 10 part-time employees who each work 12 hours a week, that’s a total of 120 hours. If you divide 120 hours by 30 hours, your company has 4 full-time equivalent employees.

This is important because once a company reaches the magic number 50 full-time employees or equivalents, they are responsible for offering health insurance and, by default, are mandated to also provide each employee with a IRS Form 1095-B.

Now that that’s out of the way, how does this play a part in filing the Form 1095-B?

How to Read Form 1095-B

The actual form, the instructions for which you can find here, is broken up into three parts:

• Part I - Responsible individual

• Part II - Information about certain employer-sponsored coverage

• Part III - Issuer or other coverage provider

The following is a breakdown, line by line, of the form:

• Line 1: Name of the employee

• Line 2: Employee’s social security number

• Line 3: Employee’s birthdate (only if Line 2 is left blank)

• Lines 4–7: Street address, city, state, and country/zip code of the employee

• Line 8: Enter the letter identifying the Origin of the Health Coverage. See Who Must File, earlier, to determine which types of coverage fall under each category listed below:

  • Small Business Health Options Program (SHOP).

  • Employer-sponsored coverage, except for an individual coverage HRA.

  • Government-sponsored program.

  • Individual market insurance.

  • Multi-employer plan.

  • Other designated minimum essential coverage.

  • Employer-sponsored coverage that is an individual coverage HRA.

• Line 9: For 2020, leave this line blank

• Line 10-15: Lines 10–15. Enter the name, EIN, and complete mailing address for the employer sponsoring the coverage. If mail isn't delivered to the street address and the employer has a P.O. box, enter the box number instead of the street address.

• Lines 16–22:Enter your name, EIN, and complete mailing address. The provider of the coverage is the issuer or carrier of insured coverage, sponsor of a self-insured employer plan, government agency providing government-sponsored coverage, or other coverage sponsor. Enter on line 18 the telephone number that an individual seeking additional information may call to speak to a person.

Part IV—Covered Individuals:

• Column (a). Enter the name of each covered individual.

• Column (b). Enter the nine-digit SSN or other TIN for each covered individual (111-11-1111). The field may be left blank if the covered individual doesn’t have a TIN.

• Column (c). Enter a date of birth (YYYY/MM/DD) for the covered individual only if an SSN or other TIN isn't entered in column (b).

• Column (d). Check this box if the individual was covered for at least 1 day per month for all 12 months of the calendar year.

• Column (e). If the individual wasn't covered for all 12 months, check the applicable box(es) for the months in which the individual was covered for at least 1 day. If there are more than six covered individuals, complete this information for the additional covered individuals on Part IV, Continuation Sheet(s). Do not count the continuation sheet(s) as additional Forms 1095-B in the count of forms submitted with the accompanying Form 1094-B.

Frequently Asked Questions about 1095-B

Where Does My 1095-B Come From?

The insurance carrier holding the policy issues Form 1095-B. Most carriers will mail a physical copy of Form 1095-B to you and will also upload a digital copy to your member portal.

If you had coverage from multiple carriers, you will receive more than one Form 1095-B.

What Do I Do with My 1095-B?

These forms are informational and are for your records only. There is no action required on your end and the form is not required in order for you to file your personal income tax return.

When Can I Expect To Receive My 1095-B?

The IRS deadline requires that insurance carriers furnish enrolled members with Form 1095-B by March 2nd, 2021.

If you’re looking for support with important compliance documents and navigating the ins and outs of employer-related compliance, it might be time to consider a Professional Employer Organization (PEO), such as Justworks. Learn more about what Justworks does here.