Subsidies & Form 1095-A

Did you receive a subsidy from the health insurance marketplace or exchange last year?  If so, you should have received or be receiving shortly Form 1095-A, also known as the Health Insurance Marketplace Statement.

Under the Affordable Care Act (ACA), individuals enrolled in marketplace coverage may be eligible for health premium subsidies if their income falls within a specific range for the number of people in their household.  If you receive any subsidies, you’ll have to report them to the Internal Revenue Service (IRS) when you file your federal income taxes. To do this, you’ll have to fill out Form 1095-A.  Completing a Health Insurance Marketplace Statement is a prerequisite for another form that actually gets filed along with your tax return to claim the premium tax credit.

Obtaining Form 1095-A

If you have marketplace coverage, you do not need to worry about obtaining a Health Insurance Marketplace Statement by yourself. Both your insurance company and the marketplace have reported your information on this form to the IRS. You will be sent a statement for each qualified health plan or policy you or your family members are enrolled in. Instructions on how and where to file the form will also be sent.

Completing Form 1095-A

A Health Insurance Marketplace Statement is a one-page form that consists of three parts:  plan information, household information, and dollar amounts for your health insurance premium and tax credit.

Part I includes information about the specific exchange you enrolled through, the company that issued your policy, your assigned policy number, the start and end date of your policy, and personal information for you and your spousetaxes

Part II includes boxes for you to list additional dependents covered under your insurance policy. If you have more than five dependents covered under a policy, you will receive an additional Health Insurance Marketplace Statement. However, if your policy covers individuals who are not your dependents – such as an adult child – you do not need to list them on your Health Insurance Marketplace Statement; they would have to submit their own statement.

Part III of the statement consists of three columns of financial information related to your monthly premiums and tax credits.

  • Column A:  The monthly premium cost of the policy in which you are enrolled.
  • Column B: The monthly premium cost of a generic marketplace plan that will be used as a baseline to determine any tax credits you are eligible for.
  • Column C: The monthly amount of advance credit payments that were made to your insurance company on your behalf.

Some of this section may already be completed for you, depending on whether you have received tax credits in advance.  After completing the Health Insurance Marketplace Statement, follow the instructions on how to file it. Be sure to keep a copy on hand, as you’ll need information from your statement when completing your tax return.

This blog is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

Health Care ReformTOKYAffordable Care Act, form 1095A, subsidies, taxes