Tax season is never fun, especially when you run into unexpected questions or snags. You want a quick answer so you can move along with the process, right? Whether you’re wondering if you need to show proof of health insurance, or even if it’s even mandatory to have prescription drug coverage, your questions are valid and we’re here to help. So, let’s get right into it. Here’s a common question that people have when it comes to health insurance and filing taxes:

Do I need to show proof of health insurance when filing my taxes?

According to the IRS (Internal Revenue Service) you are not required to show proof of health insurance when filing taxes. However, it is still recommended that you hold onto documents that verify your health coverage so you are prepared in the event that you do need it. This includes:

  • Insurance cards
  • Explanation of benefits
  • Statements from insurer
  • W-2 or payroll statements that state health insurance deductions
  • Records of advanced payments of premium tax credit
  • Any statement that confirms you (or a family member) had health coverage 
  • Form 1095 information forms

It’s easy enough, just get a small filing cabinet or even a few file folders and set one aside for your health information forums and other documents. Having it all in one place makes this so much easier, should you ever need it for any reason. The average person can organize all of their important documents, taxes, receipts, warranties and booklets fairly easily, it’s just a matter of doing the first big organizing of it and then putting the documents in place as they come in.

What are Form 1095 information forms? 

When the Affordable Care Act (ACA) was introduced in 2010, three tax forms were created at the same time. They are called 1095-A (Health Insurance Marketplace Statement), 1095-B (Health Coverage), and 1095-C (Employer-Provided Health Insurance Offer and Coverage). 

These forms help determine if you are required to pay the individual shared responsibility provision and may assist with filing your taxes. 

Form 1095-A

If you have a health insurance marketplace plan you will receive Form 1095-A directly from the insurer. This form will state information like the amount of health coverage you have, dependents (if applicable), and tax credits you are entitled to.

You can use this form to adjust tax credit payments and to claim any premium tax credits that are owed to you. In this case, you will need this form to complete your taxes properly. 

Form 1095-B

Health insurance providers and employers who offer health coverage and have less than 50 employees are required to send Form 1095-B to members of health insurance plans. This form is used to confirm that an individual (plus dependants) have adequate health coverage. 

Form 1095-C

Form 1095-C is used by large companies with more than 50 full-time employees. Employees use this form to report the health insurance coverage offered from their employer. The IRS will use this information to determine if an employer or employee will be required to pay a fine for failing to meet health insurance standards as outlined by the ACA. 

What if I have Medicare coverage?

Even if you have Medicare coverage, you are not required to show proof of insurance when filing taxes. 

If you have Part A, Medicare generally sends Form 1095-B in the early part of the year. That said, not everyone receives this form and it’s not needed to complete your taxes.

What should I do with my Form 1095-B? 

If you receive Form 1095-B from Medicare, it’s a good idea to store it with your other tax-related documents for safe-keeping. You do not need to forward it to the IRS when you file your taxes or send it back to Medicare, it’s yours to keep. 

If you have had another source of health coverage within the last year, the health care provider should send you an additional Form 1095-B.