Small Group – Form 1095-B: Who receives it and why

February 2023

Form 1095-B is a health insurance tax form used to report certain information to the IRS and taxpayers about individuals who are covered by Minimum Essential Coverage (MEC).

What are the IRS reporting requirements?

The ACA requires individuals to obtain and report that they had MEC or otherwise qualify for an exemption from the requirement. However, there is no longer an individual tax penalty following the 2017 Tax Cuts and Jobs Act. Individuals may need Form 1095-B to demonstrate MEC for nontax-related purposes.

The ACA also requires certain employers to offer all full-time employees and their dependents MEC to meet affordability and minimum value standards. This is known as the Employer Shared Responsibility requirement. Certain employers may be subject to penalties if they do not offer all full-time employees and their dependents MEC to meet affordability and minimal value standards or if they did not otherwise qualify for a safe harbor. Employers are encouraged to consult their tax advisor regarding their own reporting requirements.

Will Blue KC provide Form 1095-B to employers?

Form 1095-Bs will only be provided to members and the IRS. Blue KC is required to send Form 1095-B directly to responsible individuals and not groups. Due to concerns regarding member privacy, Blue KC has determined that copies of Form 1095-B will not be sent to employers.

What is Blue KC going to provide to the IRS?

Blue KC will report to the IRS information regarding coverage provided to direct pay individuals and employees/dependents of fully insured and cost plus groups. This information will be provided using Form 1095-B and will be transmitted to the IRS using Form 1094-B.

When will Blue KC send Form 1095-B to members?

Due to an IRS extension, Form 1095-B is required to be postmarked by March 2, 2023. Blue KC mailed 1095-Bs to members at the end of January.

Will Form 1095-B include a cover letter?

A cover letter was not included with Form 1095-B. However, the form comes with instructions issued by the IRS which are very clear. These instructions provide information and background regarding Form 1095-B and how to use it. In addition, our vendor can put a short message on the instructions, so we used this space to provide brief instructions for how to submit corrections.

When will Blue KC file Form 1095-B with the IRS?

Due to an IRS extension, 1095-Bs must be filed with the IRS by February 28, 2023, for paper filings and by March 31, 2023, for electronic filings. Blue KC intends to file several days before the March 31 filing date, but the exact date will depend on the number of corrections received and how long it takes to process them.

Will COBRA participants also receive Form 1095-B from Blue KC?

COBRA participants will receive a 1095-B if the coverage is through a fully insured or cost plus group. This is because employer-sponsored coverage, including COBRA continuation coverage, is considered MEC. Blue KC, as the provider of MEC, will report this coverage to the IRS and provide Form 1095-B to members covered under COBRA.

Will self funded groups receive Form 1095-B from Blue KC?

Blue KC will accommodate and provide an ASO employer report to assist employers with its annual IRS reporting obligations for groups on level funded ASO plans. Blue KC does not provide tax or legal advice and employers should consult their own tax or legal advisors on formal 1095 documents. This reporting will be provided to brokers upon request.

Please note that Blue KC does not provide 1095s to ASO employees but only the report to assist employers.

Does Form 1095-B have to be filed with an individual tax return?

Form 1095-B is not filed with an individual’s tax return. The information from the 1095-B is used to fill out an individual’s tax return and should be retained for their personal tax records. This is not to be construed as tax advice. Individual members should seek their own tax counsel for definitive advice.

Can I see what Form 1095-B looks like?

You can find a blank copy here. Form 1095-B is a standardized IRS form, much like the W-2. Blue KC will populate the fields with the member’s information.

Is there a chance that an individual will mistake the 1095-B envelope for junk mail?

This is unlikely. It should be apparent to an individual that this is a tax document. The envelope will say “Important Tax Return Document Enclosed.”

What happens if an individual loses their Form 1095-B?

If an individual loses their Form 1095-B they should call the Blue KC customer service number on their member ID card to request a reprint. The customer service representative will tell the customer how long it will take to receive their reprinted form.