Form 1095-B

Navigating health benefits paperwork can feel like a maze, especially when you’re tackling it for the first time. Form 1095-B often pops up in conversations about health coverage, but what exactly is it? Simply put, Form 1095-B is a crucial document that small business owners, HR managers, and employees should understand to stay compliant with health insurance reporting rules. In this article, we’ll break down what Form 1095-B means, why it’s important, and how it fits into employer and employee health benefits.

What Is Form 1095-B?

The Basics of Form 1095-B

Form 1095-B is a health coverage statement provided by health insurers and some employers to individuals each year. Its primary purpose is to report the months when someone had minimum essential coverage (MEC) through a health insurance plan during the previous year. The form helps the IRS verify that people had health coverage as required by the Affordable Care Act (ACA).  

Who Issues Form 1095-B?

Typically, insurance companies or employers who provide self-insured health plans issue Form 1095-B. Unlike Form 1095-C, which is more common among larger employers and reports coverage offers and eligibility, Form 1095-B specifically confirms health coverage under MEC for individual employees and their dependents.

Why Form 1095-B Matters for Small Businesses

Meeting ACA Reporting Requirements

Even though small businesses with fewer than 50 full-time equivalent employees aren’t subject to the employer mandate penalties under the ACA, some may still provide health coverage and need to report it properly. If your business sponsors a self-insured health plan, you might be required to provide Form 1095-B to employees and the IRS.  

Avoiding Penalties with Proper Reporting

Countries expect accurate health coverage information each tax season to prevent gaps in coverage and to ensure taxpayers comply with the law. Issuing Form 1095-B when required and making sure employees receive it on time helps protect your business against potential compliance issues and penalties.

What Information Does Form 1095-B Include?

Here’s what you and your employees can expect to find on a typical Form 1095-B:

• Beneficiary’s name, address, and Social Security number or Tax ID  
• Coverage provider’s name and employer identification number (EIN)  
• The months of the year for which health coverage was provided  
• Details about covered family members, if any

This information proves coverage for each month of the year so the IRS can ensure no gaps exist that could lead to penalties for the employee.

How Does Form 1095-B Affect Employees?

What Employees Should Do with the Form

Employees receive Form 1095-B to confirm that they had qualifying health coverage during the year. While they don’t usually need to attach the form to their tax return, it’s important to keep it safe in case the IRS asks for proof of coverage.  

When the Form 1095-B Might Help Employees

If an employee is ever audited or if they applied for premium tax credits through the Health Insurance Marketplace, having Form 1095-B handy helps show they had coverage and were not eligible for penalties or credits for lack of insurance.

How SimplyHRA Simplifies Handling Form 1095-B for Small Businesses

Compliance Made Easy

At SimplyHRA, we understand that health benefits administration can be overwhelming. Our platform automates and streamlines benefit compliance tasks, including managing Form 1095-B responsibilities for employers offering Individual Coverage Health Reimbursement Arrangements (ICHRAs) or self-insured plans.  

Supporting Employers and Employees

We help small business owners and HR managers stay compliant by keeping all the health coverage records organized and prepared for IRS reporting. Employees also benefit by receiving accurate and timely Form 1095-B statements to confirm their coverage without hassle.  

What Small Businesses Should Know About Form 1095-B Deadlines

It’s critical to stay mindful of the following deadlines to keep your business in good standing:

• January 31: Employers or insurers must furnish Form 1095-B to individuals.  
• February 28 (Paper) or March 31 (Electronic): Deadline to file copies with the IRS.  

Missing these deadlines can lead to fines or penalties, so using solutions like SimplyHRA can help ensure these dates aren’t overlooked.

Common Misconceptions About Form 1095-B

“My business is too small to worry about this.”

Even small businesses might have reporting requirements if they offer self-insured coverage. Always verify your plan type and reporting obligations to be safe.  

“Employees have to file this form with their tax returns.”

Good news here: employees usually don’t file 1095-B forms with their taxes. They just keep it handy as proof that they had coverage.

“If employees buy plans from the Marketplace, the insurer provides the form.”

If the health coverage is purchased directly through a Marketplace and not self-insured by an employer, the Marketplace or insurer typically issues Form 1095-A or 1095-B, ensuring the employee receives necessary documentation.

Final Thoughts on Managing Form 1095-B for Your Business

Handling Form 1095-B may sound a bit complicated at first, but breaking it down helps clear the fog. Whether you’re running a startup or a small growing business, understanding who must provide the form, who receives it, and why it matters is key. It’s not just paperwork—it’s a cornerstone of health benefits compliance protecting both employers and employees.

Why SimplyHRA Is Your Trusted Partner for Health Benefits Compliance

SimplyHRA is dedicated to empowering small businesses by making health benefits straightforward and compliant without the typical headaches. We simplify managing Individual Coverage Health Reimbursement Arrangements (ICHRAs) and the accompanying administrative tasks like Form 1095-B issuance. Whether you’re a small business owner juggling multiple roles, an HR manager aiming for smooth benefits administration, or an employee wanting clarity on your coverage, SimplyHRA supports you every step of the way. For tailored assistance and to see how we can help your business handle Form 1095-B and more, contact SimplyHRA at info@simplyhra.com or schedule a call via https://www.simplyhra.com/contact. Don’t let the paperwork slow you down—partner with SimplyHRA for peace of mind.

How Form 1095-B Interacts with Other Health Coverage Forms

Differences Between Form 1095-B, 1095-C, and 1095-A

It’s easy to get tangled up in the alphabet soup of health coverage forms. Here’s a quick rundown to keep things clear:  

• Form 1095-B reports who had minimum essential coverage through insurers or self-insured employers.  
• Form 1095-C is issued by larger employers (generally those with 50 or more full-time employees) to report offer of coverage and enrollment info.  
• Form 1095-A comes from the Health Insurance Marketplace when someone buys coverage there, detailing their premiums and any premium tax credits.  

Knowing these differences helps small businesses figure out their reporting responsibilities—and educates employees on where to expect their coverage documentation.

Form 1095-B’s Role in Tax Filing and Premium Tax Credits

While the form itself doesn’t usually get sent with tax returns, its data plays a supporting role. For instance, if an employee received health coverage through their employer’s self-insured plan and got reimbursed via an ICHRA (Individual Coverage Health Reimbursement Arrangement), Form 1095-B confirms months of coverage. This is vital to prove eligibility if the employee applied for premium tax credits or exemption from penalties on their tax return.

Practical Tips for Employers Handling Form 1095-B

Collecting and Verifying Employee Information Accurately

Mistakes on this form, such as incorrect Social Security numbers or wrong months of coverage, can cause IRS headaches and delay tax processing for employees. As an employer or HR manager, it’s wise to:  

• Request updated personal info from employees well before tax season  
• Double-check eligibility and coverage months carefully  
• Keep documentation organized and backed up

Using Technology to Streamline the Process

Trying to manage health coverage reporting manually can quickly become a full-time job for small business owners and HR managers. Leveraging platforms like SimplyHRA can automate data collection, generate IRS-compliant 1095-B forms, and even handle submission deadlines. This reduces human error and frees up time to focus on other aspects of running your business.

What Employees Should Know About Minimum Essential Coverage (MEC) on Form 1095-B

Understanding What Qualifies as MEC

The ACA requires most people to have minimum essential coverage to avoid tax penalties. Form 1095-B documents whether the coverage you had meets these standards. MEC can include:  

• Employer-sponsored plans (including self-insured)  
• Individual market plans that meet ACA standards  
• Government-sponsored programs like Medicaid and Medicare  

When Coverage Is Not Reported on Form 1095-B

Some types of coverage don’t meet MEC standards and won’t be on Form 1095-B, such as certain limited benefit plans or short-term health plans. Employees should be aware of this because lacking MEC can lead to tax penalties or affect eligibility for premium tax credits.

The Role of Form 1095-B in Supporting Diverse Employee Needs

Sub-Heading: Accommodating Families and Dependents
Form 1095-B not only shows health coverage for employees but also for their covered dependents. Small businesses that want to support employees’ families need to make sure their health plans and record-keeping correctly include dependents to avoid gaps in coverage documentation.  

Sub-Heading: Inclusivity in Health Benefits Documentation
With increasing workforce diversity, some employees may have unique coverage circumstances. Clear and accurate 1095-B reporting helps ensure all employees receive their correct forms regardless of family size, residency status, or plan type—important for fostering an inclusive workplace.

Troubleshooting Common Issues with Form 1095-B

What to Do If You Don’t Receive Your Form

Employees who don’t get their Form 1095-B by mid-February should first check with their employer or insurer. Employers should promptly respond to requests to avoid compliance issues or employee frustration.  

Handling Errors on Form 1095-B

If you spot mistakes on your form, report them immediately to the issuer. Employers using SimplyHRA benefit from streamlined corrections processes and updated electronic filing to ensure accurate IRS submission without stress.

How Form 1095-B Fits Into the Future of Employee Health Benefits

Increasing Flexibility with ICHRA and Individual Coverage Solutions

With the rise of Individual Coverage HRAs like those supported by SimplyHRA, the way employers handle health benefits and related forms like 1095-B is evolving. Instead of group plans locked to one-size-fits-all coverage, employees now gain the freedom to select individual plans that fit their lifestyles, with employers offering reimbursements and managing reporting digitally.  

Preparing for Changes in Health Coverage Reporting

Legislation and IRS requirements continue to adapt. Small businesses that integrate modern benefits platforms and stay informed about forms like 1095-B are set to remain compliant while providing employees with flexible, personalized health benefits.

Frequently Asked Questions (FAQs) about Form 1095-B:

Q: Who is responsible for sending Form 1095-B to employees in a multi-employer health plan?  

A: In multi-employer plans, usually the plan administrator or the main health insurance provider handles distributing Form 1095-B to covered individuals. Employers that contribute to the plan typically are not responsible for issuing the form themselves but should confirm who handles this to assist employees appropriately.

Q: Can Form 1095-B be provided electronically, and what are the requirements for electronic delivery?  

A: Yes, employers and insurers can furnish Form 1095-B electronically if employees consent to receive it that way. The IRS requires that electronic copies be easy to access, printable, and that employees are notified about how to obtain the form. Retaining employee consent documentation is crucial to stay in compliance.

Q: What happens if an employee loses their Form 1095-B after receiving it?  

A: Employees should reach out to the issuer—typically their insurer or employer—to request a replacement copy. Many providers can issue duplicate copies electronically. It’s important to have a copy for tax records, but losing it does not prevent you from filing taxes since the form’s information is primarily for verification.

Q: How does Form 1095-B relate to exemptions from the individual mandate?  

A: While the individual mandate penalty for lacking coverage is no longer federally enforced in most states, it still exists in some state tax systems. Form 1095-B provides proof of coverage that may be necessary to claim exemptions or avoid penalties at the state level or if federal requirements return in the future.

Q: If an employee switches health plans mid-year, how is that reflected on Form 1095-B?  

A: Form 1095-B reports coverage for each month of the calendar year. If an employee switches plans, they will receive a Form 1095-B from each insurer or plan showing the months they were covered under that respective plan. This multi-form scenario ensures the IRS has an accurate record of continuous coverage.

Q: Are non-U.S. residents and part-time employees issued Form 1095-B?  

A: Coverage documentation requirements generally apply regardless of residency status if the individual is enrolled in an employer-sponsored or insurer-provided health plan. Whether part-time or non-U.S. resident employees receive Form 1095-B depends on plan coverage and the employer’s reporting obligations.

Q: Can employers use third-party vendors to manage Form 1095-B filings?  

A: Absolutely. Many small and mid-sized businesses outsource health coverage reporting to vendors specializing in benefits administration and compliance, like SimplyHRA. Using experienced third-party services can reduce errors, ensure timely distribution, and maintain IRS compliance.

Q: What steps should an employer take if they realize they missed issuing Form 1095-B by the deadline?  

A: Employers should act quickly to correct the situation by filing the forms as soon as possible with the IRS and providing employees their copies. The IRS may impose penalties for failure to timely furnish and file, but prompt corrective action shows good faith and may help reduce fines. Consulting with a benefits expert or legal advisor is recommended.

Q: Does Form 1095-B affect Social Security benefits or Medicare enrollment?  

A: No. Form 1095-B solely documents health coverage details for IRS purposes. It doesn’t impact Social Security or Medicare eligibility or enrollment directly, although Medicare plans provide their own coverage documentation.

Q: How long should employees keep Form 1095-B?  

A: The IRS generally recommends keeping health coverage records, including Form 1095-B, for at least three years after the tax filing deadline, though retaining them for up to seven years may be safer if there’s a chance of audit or amended filings. It’s wise to store these documents securely.

Q: Is Form 1095-B required for individuals who have coverage through Medicaid or CHIP?  

A: Yes, individuals covered by Medicaid or the Children’s Health Insurance Program (CHIP) generally receive a Form 1095-B. These government programs provide minimum essential coverage, so the forms help the IRS verify coverage for these populations.

Q: How does Form 1095-B differ for self-insured employers compared to fully insured employers?  

A: Self-insured employers are often responsible for providing Form 1095-B directly to their employees because they administer their own health plan. In contrast, fully insured employers usually rely on their insurance carriers to issue Form 1095-B to covered employees.

Q: Can an employee receive more than one Form 1095-B in a tax year?  

A: Yes. If an employee changes health plans during the year or has coverage from multiple sources (for example, a parent’s plan and a student plan), they might receive a Form 1095-B from each insurer covering different periods of the year.

Q: What should an employee do if the information on their Form 1095-B is incorrect?  

A: Employees should contact the issuer of the form—either their employer’s benefits administrator or their insurance company—to request a correction. Employers who use platforms like SimplyHRA can update and reissue corrected forms swiftly to ensure IRS compliance.

Q: Is there a penalty for employees who don’t receive a Form 1095-B but had coverage?  

A: Generally, employees are not penalized for not receiving a Form 1095-B if they had qualifying coverage. The responsibility to issue the form lies with the employer or insurer, but employees still need to report their health insurance status accurately on their tax returns.

Q: How does Form 1095-B impact individuals who are eligible for premium tax credits and purchase plans through the Marketplace?  

A: Individuals with Marketplace coverage receive Form 1095-A, which is used to reconcile premium tax credits. Form 1095-B is for coverage outside the Marketplace, so it generally does not affect premium tax credit calculations.

Q: Are there any federal or state-specific differences in Form 1095-B requirements?  

A: Yes, while the IRS sets federal standards for Form 1095-B, some states may have additional reporting requirements or mandates around health coverage documentation. Employers should stay informed about both federal and state rules to ensure full compliance.

Q: How does Form 1095-B handle dependents who are children of divorced or separated parents?  

A: Typically, the parent who covers the child on their health plan is responsible for issuing or receiving Form 1095-B that includes the dependent’s coverage. However, complexities can arise, so employers and employees should confirm coverage details to ensure proper reporting.

Q: Does the form include information on the type of coverage, like dental or vision plans?  

A: No. Form 1095-B reports medical health coverage that qualifies as minimum essential coverage. Standalone dental or vision plans typically do not meet the MEC requirement and aren’t included on this form.

Q: Can retirees receive Form 1095-B from former employers?  

A: Retirees with employer-sponsored retiree health plans that are self-insured may receive Form 1095-B confirming their coverage. Otherwise, retirees often receive coverage through Medicare or individual plans and get corresponding forms applicable to those programs.

Partner with SimplyHRA for Seamless Form 1095-B Management and Health Benefits Compliance

Managing Form 1095-B and navigating the complex world of health benefits reporting can feel daunting, especially for small businesses juggling many responsibilities. At SimplyHRA, we’ve walked in your shoes and understand the unique challenges faced by small business owners, HR managers, and employees. That’s why our platform is built to simplify health benefits administration, automate compliance tasks like timely Form 1095-B issuance, and provide clear, accessible support so you can focus on growing your business instead of getting bogged down in paperwork.

Many of our clients have found relief through SimplyHRA’s intuitive tools that streamline expense management, documentation, and regulatory filings, making compliance worry-free. Our experts work closely with employers to customize health reimbursement arrangements that fit their budgets while empowering employees with personalized choices and easy access to their coverage information. This approach not only ensures IRS requirements are met but also boosts employee satisfaction through clarity and transparency.

If your business is ready to simplify health benefits management and tackle Form 1095-B and related reporting without stress, SimplyHRA is here to help. Reach out today for a personalized consultation by emailing info@simplyhra.com or scheduling a call at https://www.simplyhra.com/contact. Let’s take the complexity out of compliance together.