What is the 1095-A?
The 1095-A is the form you need to file your taxes if you or someone in your household had a health plan through the Marketplace in the previous year. The 1095-A will be mailed to you as early as mid-January or as late as February 1st. Remember, this form comes from the Marketplace, not the IRS. You will need to file this form with your taxes to reconcile any tax credits you may have received during the previous tax year.
If you have overpaid, meaning your income was lower than estimated, you will be refunded. If you underpaid, meaning your income was higher than estimated, you will need to pay back the portion you underpaid. If the estimated income was exact, it will be even. There is no longer a tax penalty.
The price of the insurance is a set amount. The subsidy is based on age, family size, and income. A lot of people are confused by this; I’ll try to explain. If the insurance is $400.00 a month then that’s the total cost. Let’s say that based on your age, family size, and income you get a $200 subsidy that would make the cost of your insurance $200.
If your income ends up being higher than you estimated, your subsidy would change. Let’s say the subsidy was only $100 because your income was higher than estimated you would owe back $100 a month for every month you had the insurance. If you underestimated you would get money back, you will have more than one 1095-A if you have any of the following.
- You changed marketplace plans during the year.
- You updated your application with new information— like adding or removing a family member or moving — that resulted in new enrollment in your plan.
- Different household members had different plans]
- If there are more than 5 members on the same plan
The following information is from HealthCare.gov. I decided to add helpful links because it can get extremely complicated and frustrating.
What’s on Form 1095-A and why do you need it?
Your 1095-A contains information about Marketplace plans any member of your household had in 2021, including:
o Premiums paid
o Premium tax credits used
o A figure called “second-lowest cost Silver plan” (SLCSP)
You’ll use information from your 1095-A to fill out Form 8962, Premium Tax Credit (PDF, 110 KB). This is how you’ll “reconcile” — and find out if there’s any difference between the premium tax credit you used and the amount you qualify for. If you had Marketplace coverage but didn’t take advance payments of the premium tax credit.
Learn more about the 1095-A from the IRS. You can also call the marketplace if you need help or have questions (800) 318-2596.
We understand the frustration you go through when dealing with insurance and taxes. Contact Compass Insurance Advisors (801) 901-3519 to help you with all this process.
