Form 1095-B is a crucial document in ACA reporting, used to provide details about an individual’s minimum essential health coverage.
Health insurance providers and certain small employers with self-insured plans must issue this form to covered individuals and submit copies to the IRS. It serves as proof that individuals have met the ACA’s coverage requirements, helping them avoid potential penalties under the individual mandate.
Form 1095-B is often confused with Form 1095-C, but the two serve different purposes.
Form 1095-B is primarily issued by insurance companies and small employers that offer self-insured plans, while Form 1095-C is used by large employers with 50 or more full-time equivalent employees to report offers of coverage.
Understanding the distinction between these forms is essential for ensuring accurate ACA reporting.
Who Needs to File Form 1095-B?
Several types of entities are required to file Form 1095-B with the IRS and provide copies to covered individuals.
Health insurance providers, including insurance carriers and government programs like Medicaid and Medicare, must report coverage details for their enrollees. Small employers that provide self-insured health plans are also responsible for filing this form.
Large employers, classified as Applicable Large Employers under the ACA, generally do not file Form 1095-B unless they have a self-insured plan. Instead, they use Form 1095-C to report health coverage for their employees.
Small employers should determine whether they qualify as self-insured to avoid filing mistakes.
Step-by-Step Instructions for Completing Form 1095-B
Filling out Form 1095-B accurately is essential to ensure compliance with ACA requirements. The form consists of several sections, each requiring specific information about the coverage provider and the individuals covered under the plan.
The first section of Form 1095-B requires the filer’s information, including name, address, and employer identification number (EIN). This section identifies the organization responsible for providing health coverage.
The next section captures details about the covered individual, including name, Social Security number, and date of birth. The IRS requires this information to verify that the individual was enrolled in a qualifying health plan for at least one month during the tax year.
The third section outlines coverage details, including the months in which the individual was enrolled in a minimum essential coverage plan. Each month must be marked accurately to reflect the individual’s actual coverage period.
One of the most common mistakes when completing Form 1095-B is failing to match names and Social Security numbers with IRS records. Employers and coverage providers should double-check this information before submitting the form to prevent delays or IRS rejections.
Form 1095-B Filing Deadlines and Methods
To avoid penalties, entities required to file Form 1095-B must meet IRS deadlines. For the 2024 tax year, the deadline for furnishing copies of Form 1095-B to individuals is March 1, 2025.
If filing with the IRS by paper, the submission deadline is February 28, 2025. Employers and insurance providers filing electronically have until March 31, 2025, to submit their forms.
The IRS requires entities that file 250 or more forms to submit them electronically. However, electronic filing is recommended for all organizations, as it reduces errors and speeds up processing.
Paper filing remains an option for those submitting fewer than 250 forms, but businesses should allow extra time for mailing and processing.
Penalties for Non-Compliance
Failing to file Form 1095-B on time or submitting incorrect information can lead to IRS penalties. The penalties increase each year, making it essential for employers and coverage providers to ensure compliance.
Late filings may result in fines per form, which can add up quickly for businesses handling multiple submissions.
Incorrect information, such as mismatched Social Security numbers or missing coverage months, can also trigger penalties.
The IRS allows filers to correct errors, but failure to submit accurate forms in a timely manner can result in additional fines. Ensuring that Form 1095-B is properly completed before submission is the best way to avoid compliance risks.
Common Challenges When Filing Form 1095-B
Filing Form 1095-B may seem straightforward, but many businesses and coverage providers encounter challenges during the process.
One of the most frequent issues is obtaining accurate Social Security numbers for covered individuals. The IRS requires precise name and number matches, and errors can lead to rejected forms.
Another common challenge is ensuring that the coverage months are reported correctly. Employers sometimes miscalculate an employee’s coverage period, particularly in cases of mid-year enrollments or terminations.
Filing incorrect coverage details can result in IRS penalties or require time-consuming corrections.
Businesses must also determine the correct filing method. While smaller organizations may opt for paper filing, electronic submission is generally recommended for speed and accuracy.
Those handling a large number of forms must ensure they comply with the electronic filing mandate to avoid IRS penalties.
How to Correct Errors on Form 1095-B
If an employer or coverage provider realizes they have submitted incorrect information on Form 1095-B, they must file a correction with the IRS. The correction process involves identifying the incorrect form, marking it as a corrected version, and submitting an updated form with the accurate information.
Common mistakes requiring corrections include incorrect Social Security numbers, inaccurate coverage months, and missing employer identification numbers (EINs).
Employers should also verify that corrected forms are sent to both the IRS and the affected individuals to maintain compliance.
Failing to submit corrected forms promptly can lead to further penalties. Using an automated ACA compliance solution can help businesses detect errors before submission, reducing the need for corrections and saving time.
The Role of Form 1095-B in Employee Tax Filing
Individuals receiving Form 1095-B may need it when filing their personal tax returns, even though there is no longer a federal individual mandate penalty in most cases.
The form provides documentation that the individual had minimum essential coverage, which may be required in certain states with their own health coverage mandates.
Some states, such as California, New Jersey, and Rhode Island, require individuals to maintain health coverage and use Form 1095-B as proof.
Employers and coverage providers should ensure that employees receive their forms on time so they can meet state tax requirements.
Employees who do not receive their Form 1095-B by the deadline may request a copy from their employer or insurer. Businesses should have a process in place to quickly handle these requests and provide accurate documentation.
Why Employers Should Automate ACA Reporting
Manually preparing and submitting Form 1095-B can be time-consuming, especially for businesses with multiple employees. Automating the ACA reporting process reduces the risk of human error, ensures timely filing, and simplifies compliance.
Automated systems validate employee data, check for missing information, and generate IRS-compliant forms with minimal manual input. They also provide electronic filing options, ensuring businesses meet IRS deadlines while reducing administrative burdens.
By using a trusted ACA compliance solution like 1095EZ Online, employers can eliminate the guesswork and avoid costly mistakes. Automation helps businesses stay compliant with ACA regulations without dedicating excessive time and resources to the reporting process.
How 1095EZ Online Can Help with ACA Reporting
Handling ACA compliance reporting can be challenging, especially for businesses managing multiple filings. 1095EZ Online simplifies the process by offering a streamlined, automated solution for completing and submitting Form 1095-B.
Our platform eliminates the complexities of manual filing, reducing the risk of errors and ensuring that all forms meet IRS requirements.
1095EZ Online provides expert assistance for businesses navigating ACA compliance. Their system validates data before submission, helping filers avoid mistakes that could lead to IRS penalties.
Additionally, their electronic filing capabilities ensure that submissions are processed quickly and securely.
Employers and coverage providers looking for a reliable way to manage ACA reporting can benefit from using 1095EZ Online. Our platform’s user-friendly interface and compliance-focused approach make it easier to meet deadlines and maintain accuracy in reporting.
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Form 1095-B plays an important role in ACA compliance, serving as proof of minimum essential health coverage for individuals. Businesses and health coverage providers must ensure that they file this form accurately and on time to avoid IRS penalties.
Understanding the form’s purpose, following step-by-step instructions, and using electronic filing methods can help streamline the process.
For businesses seeking an efficient solution, 1095EZ Online provides the tools and support needed to manage ACA reporting with ease. Our platform ensures accuracy, reduces compliance risks, and simplifies the filing process.
By using a trusted filing service, employers and coverage providers can focus on their business operations while maintaining full compliance with IRS regulations.