The Internal Revenue Service (IRS) has posted a packet of Patient Protection and Affordable Care Act (PPACA) tax form drafts.
Documents now available for Labor Day beach reading include the drafts of Form 1095-A, the Health Insurance Marketplace Statement; Form 1095-B, Health Coverage; Form 1095-C, Employer Provided Health Insurance Offer and Coverage; and the instructions for those forms.
The forms are supposed to help individual report on use of any PPACA public exchange plan subsidies, and to show whether they have enough health coverage to get out of paying the new PPACA penalty to be imposed on many people who fail to have what the IRS classifies as a minimum level of coverage. This year, for most affected taxpayers, the penalty will be 1 percent of income.
Employers and their benefit plan administrators are supposed to use Form 1095-C to give workers the information they need to avoid the PPACA penalty and to apply for PPACA coverage subsidies.
The forms use what to many individuals, employers and even tax and benefits professionals might seem like a new language. In addition to PPACA statutory terms, such as “minimum essential coverage” (MEC), the forms use many terms related to federal PPACA regulations. The draft of Form 1095-C, for example, would have an employer give the “Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage.” The form also would have the employer give the code for the “Applicable Section 4980H Safe Harbor” for each month in which the safe harbor arrangement was in effect.
The draft of Form 1095-A is supposed to give individual exchange plan users — many of whom have an income under 225 percent of the federal poverty level — the “SLCSP” — the “Monthly Premium Amount of Second Lowest Cost Silver Plan” — for every month. The individual is supposed to enter the information from Form 1095-A into Form 8962, Premium Tax Credit.