Form 1095-A - Health Insurance Marketplace Statement

Form 1095-A, the Health Insurance Marketplace Statement, is a tax document issued by the Health Insurance Marketplace to individuals and families who enrolled in a health plan through the Marketplace, such as HealthCare.gov or a state exchange. The form reports the months of coverage, the monthly premiums, the cost of the second lowest cost silver plan used to calculate subsidies, and any advance premium tax credit paid on the enrollee's behalf. Anyone who had Marketplace coverage during the year receives a Form 1095-A, typically by early in the following year, and needs it to complete their tax return. The information is required to reconcile any advance premium tax credit and to claim the premium tax credit under the Affordable Care Act. Because the figures on the form drive the premium tax credit calculation, recipients should keep the form and use it when preparing their return rather than discarding it as informational only.

You use Form 1095-A to complete Form 8962, Premium Tax Credit, which reconciles any advance premium tax credit you received with the credit you are actually entitled to based on your final income for the year. The monthly amounts on Form 1095-A, including the premium, the second lowest cost silver plan benchmark, and the advance credit payments, transfer to Form 8962, where you calculate whether you received too much or too little subsidy. If your advance payments exceeded the credit you qualified for, you may have to repay some of the excess, subject to caps based on income; if you received less than you were entitled to, you can claim the difference as a credit. You must file Form 8962 if you had Marketplace coverage with advance credit payments, even if you are not otherwise required to file. Because the reconciliation affects your refund or balance due, you should enter the Form 1095-A amounts carefully on Form 8962.

The premium tax credit reported through Form 1095-A is a refundable credit under the Affordable Care Act (Internal Revenue Code Section 36B) that helps eligible individuals and families afford health insurance purchased through the Marketplace. Eligibility depends on household income relative to the federal poverty line and on not having access to affordable employer coverage or other minimum essential coverage. The credit can be paid in advance directly to the insurer to lower monthly premiums, which is the advance premium tax credit shown on Form 1095-A, or claimed when you file your return. Because the advance credit is based on estimated income, you must reconcile it on Form 8962 using the Form 1095-A figures and your actual income, which can result in additional credit or repayment. Because the credit can substantially reduce health insurance costs but depends on accurate income reporting, recipients should use Form 1095-A to reconcile the credit and confirm their eligibility for the tax year.

If your Form 1095-A is incorrect or you did not receive it, you should contact the Health Insurance Marketplace where you enrolled, because you need accurate information to file your return correctly. The Marketplace, not the IRS, issues and corrects Form 1095-A, and you can usually view or download it from your online Marketplace account in addition to receiving a mailed copy. Common errors include wrong premium amounts, incorrect months of coverage, or an inaccurate second lowest cost silver plan figure, all of which affect the premium tax credit calculation on Form 8962. Filing with an incorrect form can lead to a wrong credit amount and a later IRS notice, so you should obtain a corrected Form 1095-A before filing if possible. If you receive a corrected form after filing, you may need to amend your return. Because the form drives your credit reconciliation, resolving any error with the Marketplace first protects the accuracy of your return.

Form 1095-A is not the same as Form 1095-B or Form 1095-C, although all three report health coverage; the difference lies in who provides the coverage and how the form is used. Form 1095-A comes from the Health Insurance Marketplace and is required to reconcile the premium tax credit on Form 8962, making it essential for completing the return of anyone who had Marketplace coverage. Form 1095-B is issued by insurers and certain employers to report minimum essential coverage, and Form 1095-C is issued by applicable large employers to report offers of employer-sponsored coverage. Unlike Form 1095-A, the B and C forms are generally informational and are not needed to compute a credit, since the federal individual mandate penalty was reduced to zero, though some states have their own coverage requirements. Because only Form 1095-A drives the premium tax credit reconciliation, recipients should be sure they have the correct form before relying on it to prepare their return.