Extension for Form 1095 Reporting What everyone needs to know

Many more taxpayers will see Form 1095’s this year. These forms are required to prove you have had health insurance coverage for the year. Due to the vast amount of work required to create this form, the IRS is granting a delay in getting versions of this form to taxpayers. Here is what you should know

For 2015 tax returns, everyone employed by a company with 50 or more employees will receive a new Form 1095. This form is in addition to the Form 1095’s received by other taxpayers using the Marketplace to purchase their health insurance. You need this form to file your taxes as it provides the necessary proof that you have adequate health insurance for the year.

A recent announcement by the IRS provides a delay for the issuing of this form due to complications in creating the proper form by employers and insurers.

What is happening

You need Form 1095 to file your income taxes for 2015. Without the form, you could be subject to the uninsured tax penalty called the shared responsibility payment. Unfortunately, many businesses do not have enough time to get the correct health insurance information and transfer the data into their other systems to generate the form. So the IRS has granted an extension for Form 1095 B and 1095 C. Here are the old and new dates.

Form Purpose Original due date New due date
1095 B & 1095 C Report to employees of adequate health insurance coverage by month 2/1/2016 3/31/2016
Summary forms 1094 B & 1094 C Summary forms sent to the government confirming employee health care coverage 2/29/2016
(3/31 if filing electronically)
(6/30 if filing electronically)

Note: This delay does not impact the timing of Form 1095 A, Health Insurance Marketplace Statement. 1095 A is the form you receive if you purchase your health insurance through the Marketplace and not through your employer. Nor does this impact those who have their health insurance through other programs like Medicare.

What it means to you

Since the IRS understands that taxpayers do not wish to wait to file their 2015 tax returns, the service is allowing for you to file your 2015 tax return without receiving this form. Here are some suggestions.

Check with your employer. If you work for an employer with more than 50 employees, check with your human resources to find out when you expect to receive the 1095 form. If there is no delay, then wait for Form 1095.

Look for other supporting documents. For 2015, the IRS will allow you to support your insurance coverage with means other than Form 1095. Simply collect this proof of insurance and save it in case of a future audit.

Wait. If you changed jobs or have a situation that suggests there may be a gap in insurance coverage you may wish to wait until you receive your documents. Please remember there is no corresponding delay granted to file your tax return. So if you still wish to wait, either file your tax return in April or file an extension. Taxes owed are still due on or before April 18th.

Considering the Affordable Care Act requires health insurance information to be transferred from insurance carriers into payroll reporting, it is understandably a complex reporting change. Since the shared responsibility tax payment is increasing substantially in 2015 and beyond, you will want to ensure you have adequate proof of qualified health insurance.



2014 Health Savings Account Limits Announced

If you are participating in an HSA, recently announce limits for 2014 will help you get a jump on planning for next year.

The savings limits for the ever-popular Health Savings Accounts (HSA) are now set for 2014. The new limits are outlined here with current year amounts noted for comparison purposes.

What is an HSA?

An HSA is a tax advantaged savings account where part of your wages can be contributed on a pre-tax basis. There is no tax on the funds contributed or the interest or investment earnings as long as the funds are used to pay for qualified medical, dental and vision expenses. To qualify for this tax-advantaged account you must be enrolled in a “high deductible” health insurance program as defined by HSA rules.

The limits

Health Savings Account (HSA) Limits 2013 NEW! 2014 Change
Maximum Annual Contribution
Self $3,250 $3,300 +$50
Family $6,450 $6,550 +$100
Add: 55+ catch up contribution $1,000 $1,000 nc
Health Insurance Requirements
Minimum Deductible Self coverage $1,250 $1,250 nc
Family coverage 2,500 2,500 nc
Out-of-pocket Maximum Self coverage $6,250 $6,350 +$100
Family coverage 12,500 12,700 +$200

Note: To qualify for an HSA you must have a qualified High Deductible Health Plan (HDHP). To qualify, a plan must meet minimum deductible requirements that are typically higher than traditional health insurance. In addition, your coverage must have reasonable out-of-pocket payment limits as set by the above noted maximums.

Not sure what an HSA is all about? Check with your employer. If they offer this option in their health care benefits, they will have information discussing the program and its potential benefits.