Yes, Form 1095-B is still relevant despite the federal individual mandate penalty being reduced to $0 starting in 2019 under the Tax Cuts and Jobs Act. Here’s why:
1. Compliance with the Affordable Care Act (ACA)
- The ACA requires certain entities, such as health insurance providers and self-insured small employers, to file Form 1095-B to report that individuals had Minimum Essential Coverage (MEC) during the year.
- This form demonstrates that individuals were covered, even if the federal penalty no longer applies.
2. State Individual Mandates
- Some states have enacted their own individual mandates with penalties for not maintaining MEC. These states rely on Form 1095-B (or similar forms) to verify coverage. Examples include:
- California
- Massachusetts
- New Jersey
- Rhode Island
- Vermont (no penalty but requires reporting)
- Washington, D.C.
Residents in these states must report MEC to avoid state-level penalties, making Form 1095-B critical for compliance.
3. Employee and Taxpayer Reference
- While individuals no longer need Form 1095-B to file their federal taxes, it serves as a record of coverage. Taxpayers may still find it helpful for personal records or state tax filings.
4. Reporting Requirements
- Insurance Providers: Must still file Form 1095-B with the IRS and provide a copy to covered individuals.
- Self-Insured Small Employers: Small employers offering self-insured plans must file Form 1095-B to report the coverage provided.
5. IRS Penalties for Non-Compliance
Entities that fail to file Form 1095-B or provide it to covered individuals may still face IRS penalties unless they qualify for a waiver or reasonable cause exception.
Summary
Form 1095-B remains relevant for:
- State individual mandates with active penalties.
- Compliance requirements for insurance providers and self-insured employers.
- Providing a record of health coverage to individuals.
If you’re in a state with an individual mandate or are required to report MEC, ensuring Form 1095-B compliance is essential. Let me know if you need help navigating these requirements!
