What Is the Difference Between Form 1095-B and 1095-C?

Under the Affordable Care Act (ACA), the IRS uses the 1095 series of forms to verify that individuals have required health coverage. Form 1095-A is for those who used the Health Insurance Marketplace, while Forms 1095-B and 1095-C relate to coverage from employers and other providers. Understanding the roles of these two documents depends on who issues them and what information they contain.

Understanding Form 1095-B

Form 1095-B, titled “Health Coverage,” is an informational document that serves as proof that you and any dependents had minimum essential coverage (MEC) for some or all months during the tax year. This form is sent by the providers of health coverage, who also report this information to the IRS. Issuers include:

• Health insurance carriers
• Government-sponsored programs like Medicare Part A, the Children’s Health Insurance Program (CHIP), and most Medicaid programs
• Small employers with fewer than 50 full-time equivalent employees that offer self-insured health plans

Part IV, “Covered Individuals,” lists the name of each person covered by the health plan, their Social Security number or date of birth, and indicates which months they had coverage. You should verify that the information on the form is accurate.

Understanding Form 1095-C

Form 1095-C, “Employer-Provided Health Insurance Offer and Coverage,” is issued by Applicable Large Employers (ALEs). An ALE is defined by the IRS as an employer with 50 or more full-time employees, or full-time equivalent employees, on average during the prior year. These employers send Form 1095-C to any employee who was full-time for any month of the year, regardless of whether they enrolled in the health plan.

Part I of the form contains identifying information for the employee and employer. Part II, “Employee Offer and Coverage,” is the core of the form and provides a month-by-month report on the health insurance offered to the employee. This section uses codes on Line 14 to describe the coverage offered, shows the employee’s share of the lowest-cost monthly premium on Line 15, and uses codes on Line 16 to provide the IRS with reasons why the employer may not be subject to a penalty.

Part III, “Covered Individuals,” lists the people covered under the employer’s plan and for which months. This part is only completed if the employer has a self-insured health plan. If the plan is fully-insured, this section is left blank because the insurance carrier reports the coverage on Form 1095-B.

Key Distinctions and Common Scenarios

The primary difference between the forms is who issues them and why. Form 1095-B is sent by the provider of health insurance (like an insurance company or Medicare) to prove you had coverage. In contrast, Form 1095-C is sent by a large employer to report on the health insurance it offered you, which helps the IRS enforce employer ACA requirements.

If you work for a large company with a fully-insured plan, where it pays a premium to an insurance company, you will receive two forms. You will get a 1095-C from your employer detailing the offer of coverage, and a 1095-B from the health insurance carrier confirming your actual enrollment.

If you work for a large company with a self-insured plan, where the employer pays for claims directly, you will only receive Form 1095-C. Your employer completes Part III of this form to report your enrollment, making a separate 1095-B unnecessary.

An employee at a small company that is not an ALE will only receive a 1095-B from the insurance provider. Individuals covered by government plans like Medicare or Medicaid will also receive a Form 1095-B from the relevant agency.

Using Forms 1095-B and 1095-C for Tax Filing

You do not need to file Form 1095-B or 1095-C with your federal tax return, as the issuers have already sent the same information to the IRS. Your responsibility is to review the forms for accuracy and keep them with your other tax documents. These forms serve as an official record of your health coverage for the year. If you find any incorrect information, you should contact the issuer—your employer or insurance provider—to have it corrected.

While the federal individual mandate penalty was reduced to $0, these forms remain important for state tax purposes. Some states have implemented their own individual health insurance mandates with financial penalties. Residents of these states may need the information from their 1095-B or 1095-C to complete their state tax returns and prove they had qualifying health coverage.