Every year, Affordable Care Act (ACA) reporting brings a familiar set of forms into the payroll office: 1095-A, 1095-B, and 1095-C. Under the ACA, the IRS requires employers and health plan providers to share information about their plans and coverage using one of the 1095 forms. These all vary depending on type of coverage, who provides it, and what information the IRS needs to document.
Knowing which form applies to your employees’ situation—from Marketplace coverage in 1095-A to employer-sponsored plans in 1095-C—ensures People and payroll teams file accurately and resolve employee questions easily.
Read on to learn the difference between 1095-A vs. 1095-B vs. 1095-C. We’ll break down when they’re issued and explain how to build streamlined, manageable ACA reporting workflows.
What are 1095 forms?
1095 forms are ACA-required documents that verify if an individual received the minimum essential coverage during a given tax year. The ACA uses this information to confirm accurate health coverage reporting, determine eligibility for premium tax credits, and verify that an employer met its shared-responsibility requirements. These forms help the IRS match coverage records with the rules that apply to employers, insurers, and individual taxpayers.
As noted above, there are three versions of the 1095 form. Each corresponds to a different type of health coverage and filer:
- 1095-A: Issued by Marketplace plans 1095-A
- 1095-B: Issued by insurers and small employers
- 1095-C: Used by applicable large employers to report employer-sponsored coverage
What’s a 1095-A Form?
Form 1095-A reports health coverage received through the Health Insurance Marketplace. It outlines the selected plan, months of coverage, and any advance premium tax credits that lowered monthly payments. Taxpayers need this form to complete tax filings with Form 8692, which is used to calculate the premium tax credit.
Anyone who received Marketplace coverage for any portion of the tax year receives Form 1095-A from their Marketplace provider. If individuals switch health care coverage, they’ll receive Form 1095-A from each insurance provider.
Taxpayers rely on this form for three key reasons when filing their annual tax return:
- Reconcile advance premium tax credits (APTC): If an individual receives monthly financial assistance, they need to compare the amount used with the amount they qualify for. Form 1095-A provides the numbers to make that comparison.
- Claim the premium tax credit: If an individual was eligible for advance payments but didn’t use them, they can use the form to calculate and claim the full credit on their tax return.
- File accurately: 1095-A provides all the necessary information about coverage dates, premiums, and health insurance plan information, so taxpayers can accurately complete Form 8962.
Filing a tax return without an accurate Form 1095-A will likely delay tax return processing, trigger a tax adjustment, and potentially result in penalties or interest if additional tax is owed.
What’s a 1095-B Form?
Form 1095-B verifies that an individual received minimum essential coverage (MEC) during the tax year, as required by the ACA. The purpose of this tax form is to show that taxpayers and their dependents hit the required health coverage. The form is sent by the insurance provider, government program (like Medicaid or the VA), or self-insured small businesses with less than 50 full-time employees.
Taxpayers rely on this form to verify important details about their health coverage, including:
- Proving compliance with federal and state health coverage mandates
- Confirm information like policyholder names, months of coverage, and details about the insurer or employer
Form 1095-B doesn’t need to be submitted to the IRS with your annual federal income taxes, although some states do require it for state tax filings. Even if you don’t have to file Form 1095-B, it’s still necessary to prove you met state and federal coverage requirements. If the IRS can’t confirm your coverage, they'll ask you to submit information provided on the form.
What is a 1095-C Form?
Form 1095-C is a tax document that reports the health insurance coverage offered by an employer to full-time employees throughout the tax year. Only Applicable Large Employers (ALEs)—companies with more than 50 full-time employees—need to issue this form. The form outlines the type of health insurance coverage offered, months employer-sponsored health coverage was made available, and the employee’s share of the lowest-cost monthly premium.
Employees and employers both rely on accurate 1095-C to confirm:
- That employers met their ACA shared-responsibility requirements
- That employees do or don’t qualify for premium-tax credits
Employees don’t submit Form 1095-C when submitting tax returns, they’re important to keep for personal tax records. The IRS may need to verify employer coverage or premium tax credit eligibility outlined on the tax form.
Key differences between forms 1095-A vs. 1095-B vs. 1095-C
When are 1095 Forms issued and filed?
Each version of Form 1095 follows its own distribution and filing schedule. Understanding the timelines helps HR, payroll, and individual taxpayers stay compliant.
Form 1095-A (Issued by January 31)
The Health Insurance Marketplace issues Form 1095-A by January 31. It’s typically sent by mail, but you can also access the form in your Marketplace account in early February. Taxpayers need this form before filing their annual tax return.
Form 1095-B (Issued by January 31)
Insurers, government programs, and small employers need to provide Form 1095-B by January 31. Although individuals don’t file this form with their tax return, they need it for their personal tax documents in case they’re asked to provide proof of coverage.
Form 1095-C (Issued by March 3)
ALEs must provide Form 1095-C to full-time employees by March 3. Employers must file copies with the IRS. The deadline for paper filings is February 28. Electronic filings must be received by March 31.
Best Practices for Managing 1095 Forms in Payroll and HR
For HR and payroll departments submitting 1095-B and 1095-C, accurate reporting relies on standardized health coverage documentation. Here are three practices to support streamlined tax filings at year-end.
1. Maintain accurate, month-to-month coverage records
Keep records on ACA eligibility, health coverage enrollment, and coverage offers with the same detail for all payroll tax reporting—IRS Form 941, Federal Unemployment Tax Act (FUTA), and year-end W-2s and 1099s forms for remote workers. Reliable data ensures that information on 1095 forms align with ACA requirements and reduces the risk of penalties.
2. Keep organized documentation for audits
Not all 1095 Forms need to be submitted to the IRS alongside annual tax filings. That doesn’t make them any less important. Store copies of all 1095 forms, employee coverage choices, affordability calculations, and filing receipts. Organized records make it simple to respond to IRS inquiries and demonstrate compliance during internal or external audits.
3. Communicate clearly with employees about tax forms
Tax time can be overwhelming for employees who aren’t well-versed in nuanced tax filings. Proactive guidance reduces confusion and helps staff understand how employer coverage aligns with premium tax credits.
Streamline ACA compliance and global payroll with Oyster
ACA reporting gets tough when payroll teams juggle multi-state employees, shifting eligibility rules, and separate tax reporting avenues. People teams need the right system to remove the friction, keeping coverage data consistent and automating core payroll tasks.
Oyster’s Global US PEO solutions give teams a centralized place to run payroll, document coverage, and stay aligned with local and federal requirements. And when you hire beyond US borders, Oyster’s EOR services handle international payroll—so your team doesn’t have to manage separate insurance companies or learn country-specific health coverage rules.
Discover how Oyster can support compliant, streamlined payroll and simplify health coverage reporting.
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