As a small business owner, preparing for tax season involves more than organizing receipts and calculating profits. If you offer health insurance to your employees, it’s essential to ensure your compliance with the Affordable Care Act (ACA), which includes filing Forms 1095. These forms provide critical information about the health coverage offered to employees and must be distributed well before filing deadlines. This guide will help you navigate the process smoothly.
What Are Forms 1095?
Forms 1095 are part of the ACA reporting requirements and serve as proof of health insurance coverage. There are three types of Forms 1095:
- Form 1095-A: Issued to individuals who purchase health insurance through the Marketplace.
- Form 1095-B: Typically provided by insurance companies for individuals covered under employer-sponsored plans, Medicaid, or Medicare.
- Form 1095-C: Filed by employers with 50 or more full-time employees to report the coverage offered to employees and their dependents.
Small businesses that provide health insurance to their employees through a group plan must ensure their insurance carrier or plan administrator prepares and distributes these forms to employees.
How to Obtain Forms 1095
If you’re an employer, your insurance provider will often handle Form 1095-B or Form 1095-C on your behalf. However, as a small business owner, you need to verify this with your insurer to ensure compliance.
Here’s what you need to do:
- Contact Your Insurance Provider: Confirm whether they will issue Form 1095-B or Form 1095-C to your employees.
- Verify Accuracy: Review the information to ensure names, Social Security numbers, and coverage details are correct before distribution.
- Meet Deadlines: Forms must be provided to employees by March 4, 2025, and filed with the IRS by February 28, 2025 (paper filing) or April 1, 2025 (electronic filing).
Why Forms 1095 Are Important
These forms are critical for employees during tax season. Employees need them to:
- Verify their health insurance coverage.
- Avoid penalties for lack of minimum essential coverage.
- Confirm eligibility for premium tax credits if they purchased coverage through the Marketplace.
Failure to provide or file these forms correctly could lead to penalties for non-compliance with the ACA.
Stay Ahead with Expert Guidance
Managing health insurance compliance can be challenging, especially with ever-changing regulations. At Bay Area Health Insurance, we specialize in helping small business owners navigate the complexities of group health insurance and ACA requirements.
Don’t let tax season catch you unprepared. Contact us for guidance on Forms 1095 and other ACA compliance needs. We will help you stay on top of your responsibilities while ensuring your employees are ready for tax season.