What Is Form 1095-C?

I received Form 1095-C in the mail. What am I supposed to do with it?

Form 1095-C is for informational purposes and does not get filed with your tax return. fizkes/Getty

Insider's experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.

• Form 1095-C is required under the Affordable Health Care Act.
• Companies file this form with the IRS to account for their health-insurance offerings.
• The form is most important for those who have chosen marketplace coverage and claimed tax credits.
• See Personal Finance Insider's picks for the best tax software »

The 1095-C form, titled "Employer-Provided Health Insurance Offer and Coverage," came into being in 2015 as required by the Affordable Care Act (ACA). It's filed by employers who must offer health insurance coverage to full-time employees and dependents or face penalties. It describes the coverage offered and determines eligibility for tax credits. Employers will send a copy to you and the Internal Revenue Service. You do not need to file it with your tax return.

What is Form 1095-C?

The ACA, signed into law in 2010, says that companies of a certain size must offer health insurance coverage to employees. The 1095-C is how the government holds companies and organizations accountable for complying with the requirement.

The form records the type of coverage offered, the months coverage was offered, the employee and dependents who were enrolled in the plan, and the cost of the employee's portion of the coverage. 

Employers that have an average of at least 50 full-time employees, meaning they work at least 30 hours a week, must file the form. They are known as "Applicable Large Employers," or ALEs, and they must offer their full-time employees the opportunity to enroll in a health insurance plan that is affordable and covers at least 60% of the total allowed cost of benefits that are to be incurred.   

Note: For most people, the 1095-C doesn't affect how they file their taxes.

What's reported on a 1095-C

IRS

The first part of the form includes your basic information, including your address and social security number, as well as that of your employer. The second details what coverage is offered, your age on Jan. 1, and the month that the plan begins each year.

IRS

The third part of the form shares who was covered by the plan and the months they were covered. 

Form 1095-C is also used in determining the eligibility of employees for a tax credit that helps cover the premiums for insurance purchased through a Health Insurance Marketplace, internet-based federal and state insurance markets set up under the ACA. Employees qualify for the credit if their employer didn't offer coverage that met mandatory levels of affordability and value.

Note: The 1095-C form doesn't require any actual work on the part of the taxpayer. It's simply a way for the IRS to ensure that large companies are offering affordable coverage.

How does a 1095-C affect how I file my taxes? 

The 1095-C form can cause quite a bit of confusion when employers don't communicate well about health-insurance options, affordability, or their benefits programs in general, says Ross Baker, a benefits advisor at American Exchange, which provides information about healthcare access options.

"Frankly, most people are confused about their health insurance, whether from their employer or through the marketplace, so the forms about their health insurance are even more confusing," Baker says.

Use Personal Finance Insider's calculator to estimate your refund, or how much you owe, in a few easy steps

For most people, the 1095-C doesn't affect how they file taxes. It only comes into play if an employee enrolls on a health insurance marketplace with a tax credit, says Baker. It's used to determine if coverage offered met the minimum requirements. If not, the employer might have to pay a penalty. If the coverage does meet the affordability test and the employee claims tax credits, they could be required to pay them back.

If you aren't enrolled in a marketplace plan, there's no need to wait for a Form 1095-C before filing your tax return. If you declined your employer's plan and enrolled in marketplace coverage, then you would need to wait for Form 1095-A before filing your taxes.

What's the difference between a 1095-C, 1095-B, and 1095-A 

Forms 1095-A and 1095-B are also related to health insurance. Health insurance marketplaces use Form 1095-A to report information on enrollments in a qualified health plan in the individual market. Form 1095-B provides information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage.

The bottom line

Most people will just file away their Form 1095-C for future reference. Others who decline their employer's plan and are enrolled in marketplace coverage have to wait to receive Form 1095-A before filing taxes.

For those who choose to receive tax credits toward your insurance premiums, be aware that if the employer's coverage plan meets the affordability test, you could be required to pay back some or all of those credits.