The Patient Protection and Affordable Care Act was implemented in the USA to prevent the rights of people as being a patient against the high charges for medical services from the hospitals. The government with the help of the Internal Revenue Service started an initiative in the name of Obamacare. It made mandatory for all the people who file taxes under form 1040 to have a minimum essential coverage. Otherwise, you can be imposed high penalties under section 6721 and 6722.
This act also made mandatory for the health insurance providers to submit all the information about the person getting insured under the form number 1095B to Internal Revenue Service. Also, this document is to be complemented by form number 1094B. This is a transmittal document which is to be submitted to furnish information about the coverage of the individual.
In legal terms, form 1095B is a document to be filed by the insurer and insurance providers to report certain information to the Internal Revenue Service and to the taxpayers about the individuals who are covered by minimum essential coverage. It also states that they are not liable for the individual shared responsibility payments.
This form is submitted in providing assurance to the Internal Revenue Service that all the persons who are filing taxes are safe and secure under different health insurance schemes and can be prevented from any exploitation by any hospital.
The 1095-B Form provides four essential information:
Information about the person who is covered by the insurance policy, which includes-
Taxpayer Identification Number
Particulars about the employer, if the health plan is employer-sponsored which shall report-
Employer Identification Number
Identifies the insurance company providing coverage
Record of the dependents who are covered by the insurance plan which includes-
Taxpayer Identification Number, if available, otherwise date of birth
Information about the scheme under which they are covered
The period of coverage in the terms of months for which they are insured under this scheme in the relevant year
This form is to be submitted by the insurers for the following persons:
Employers who use the Small Business Health Options Program (SHOP) for ensuring their employees are secured
Individual who has purchased the scheme from off-marketplace
Small self-funded groups who got covered outside of the marketplace
Small groups, fully insured from either SHOP or off-marketplace
Applicable large employers who are fully insured
It has to be submitted on annual basis, not later than 28th February or 31st March (if submitted electronically) of the year following the calendar year in which the minimum essential coverage is provided to an individual.
The individual who is paying taxes under the form 1040 or its counterparts has to submit the copy of this document as well with it to ensure that the taxpayer is secured under any minimum essential coverage or qualified health plans.
It has to be made sure while providing and collecting information as being an insurer and taxpayer that the information is totally true and is free from any misstatements as it can lead to heavy fines charged by the government.