The ABCs of Form 1095.

• Author: Rempalski, Kristy L.

Although the 2016 filing year will be the third year for which tax return preparers need to evaluate how their individual clients have fulfilled the requirements of the Patient Protection and Affordable Care Act (PPACA) of 2010, P.L. 111-148, individual shared-responsibility provision, it will be the first year in which preparers will be able to benefit from consistent practices related to the Form 1095 series. In prior years, certain forms were optional or had delayed issuance dates.

The PPACA individual shared-responsibility provision requires all individuals to do one of the following:

* Maintain minimum essential health coverage for each month of the year,

* Qualify for an exemption; or

* Pay a shared-responsibility payment with the filing of Form 1040, U.S. Individual Income Tax Return.

Forms 1095-A, Health Insurance Marketplace Statement, 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage, are information returns not included with Form 1040. Understanding them will aid preparers in preparing their clients' individual income tax returns and fulfilling their professional due-diligence responsibilities. Below is a brief rundown of each form. See the exhibit for a guide to the forms related to PPACA health insurance coverage requirements.

Form 1095-A: Individuals purchasing health insurance through the health insurance marketplace (an exchange) will receive this form. The deadline for issuing Form 1095-A to recipients is Jan. 31.

Form 1095-B: Individuals acquiring health insurance directly from an insurance company, from a company-sponsored health insurance provider, or from small, self-insured employers (fewer than 50 full-time-equivalent employees (FTEs)) should receive this form. Form 1095-B was optional in 2014, and in 2015 the IRS extended the date by which the form must be furnished to recipients to March 31,2016. For 2016, insurers must issue Form 1095-B by Jan. 31,2017.

Form 1095-C: This form is issued by employers, including government employers, with 50 or more FTEs. Form 1095-C identifies whether insurance was offered to the employee and the actual coverage provided. Individual taxpayers who purchased health insurance through the marketplace may use information from Form 1095-C to determine eligibility for a premium tax credit. This form was optional in 2014, and in 2015 employers had until March 31,2016, to furnish the form to recipients. Beginning in 2016, the deadline for issuing Form...