1095-A vs 1095-B: Key Differences You Need to Know

Understanding the distinctions between IRS forms 1095-A and 1095-B is crucial for taxpayers navigating health insurance reporting requirements. These forms document health coverage status and can significantly affect the tax filing process.

This article explores the key differences between these two forms to clarify their specific purposes and implications.

Coverage Sources

Form 1095-A is issued by the Health Insurance Marketplace for individuals who purchase health insurance through these platforms. It includes details about coverage, premium amounts, and advance payments of the premium tax credit. This information is necessary for reconciling these credits on tax returns.

Form 1095-B, on the other hand, is provided by insurance companies, government programs like Medicaid, or employers offering self-insured health plans. It serves as proof of minimum essential coverage under the Affordable Care Act, listing the months during which the taxpayer and their dependents were covered. While Form 1095-A focuses on tax credits, Form 1095-B verifies compliance with coverage mandates.

Issuance and Eligibility

Form 1095-A is sent to individuals enrolled in a qualified health plan through the Health Insurance Marketplace. These plans often involve premium tax credits to reduce insurance costs, which are reconciled during tax filing. Accurate reporting is critical to avoid adjustments to tax liability.

Form 1095-B is issued to those with health coverage through private insurers, Medicaid, or self-insured employer plans. It confirms compliance with minimum essential coverage requirements and helps avoid penalties under state-level mandates where applicable.

Tax Filing Requirements

Recipients of Form 1095-A must use it to reconcile advance premium tax credits with their actual income by completing Form 8962. Any discrepancies can lead to adjustments in tax liability, potentially affecting refunds or triggering audits.

Form 1095-B verifies compliance with minimum essential coverage requirements. Although the federal individual shared responsibility payment was reduced to zero starting in 2019, the form remains relevant in states with their own mandates, like California and Massachusetts. Taxpayers in these states must retain Form 1095-B for their records as proof of coverage.

Steps to Correct Errors

To address errors on Form 1095-A, review the form and contact the Health Insurance Marketplace for guidance on corrections and required documentation. Since this form impacts premium tax credit reconciliation, resolving discrepancies promptly is essential.

For Form 1095-B, contact the insurance provider, employer, or government program that issued the form to address any inaccuracies. Correcting errors ensures coverage records are accurate, which is especially important for taxpayers in states with health coverage mandates.