How the Self-Employed Can Use IRS Form 1095-A

Did you obtain your health insurance coverage last year through Obamacare? Did you also receive Obamacare tax credits?

If your answer to both questions is yes, you need to have IRS Form 1095-A. You can’t file your taxes without it.

Health insurance for the self-employed

When you’re self-employed, you don’t have an employer to provide you with health insurance. In the past, it would be hard for self-employed people to obtain health coverage. Getting medical insurance was especially true if they had a preexisting condition.

All this changed when Congress enacted the Affordable Care Act in 2010. Now anyone can obtain health insurance. Insurers can’t deny you coverage if you have a preexisting condition.

You can get Obamacare coverage online through a health insurance exchange. Nowadays, several states have their own exchanges. But the majority use the federal exchange at www.healthcare.gov. These exchanges are also called “marketplaces.”

Obamacare health coverage mandate through 2018

One of the most significant changes created by Obamacare was the health insurance mandate. During 2014 through 2018, all Americans had to have at least minimal comprehensive health insurance coverage. If you lacked coverage, you had to pay a penalty to the IRS.

The health insurance mandate applies to the self-employed as well as everybody else. Congress ended the individual healthcare insurance mandate starting in 2019. But still in place for 2018. When you file your 2018 tax return, you must show that you had coverage or pay a penalty.

Obamacare health insurance tax credits

Another revolutionary feature of Obamacare was the creation of health insurance premium tax credits. These ensure that moderate and lower-income people don’t have to spend more than a specified percentage of their income on health insurance. These percentages range from 3.0% to 9.5%, depending on household income.

You are eligible for the premium credit if:
• Your household income is between 100% and 400% of the federal poverty level
• You do not qualify for other affordable coverage
• You file a joint tax return if you’re married

For 2018, the credit was available for individuals with household incomes below $48,240. And it was available for families of four with incomes below $98,400.

Most people who obtain their health insurance through the Obamacare exchanges qualify for these tax credits. These credits can pay for all or most of your health insurance costs. The exact amount you receive depends on your income and family size.

You don’t need to owe any income taxes to receive the credit. Moreover, the federal government pays the credit amount directly to your health insurance company when you enroll in your health insurance plan.

Form 1095-A show your tax credit payments

You would receive Form 1095-A if you received Obamacare tax credits. Your health exchange completes the form, not the IRS. According to the rules, you should receive it by mail no later than mid-February. It is also available online at your account on your health insurance exchange. Your health exchange also sends a copy of the form to the IRS.

Form 1095-A shows how much your Obamacare health insurance coverage cost during the year. It also shows the amount of the tax credits paid on your behalf.

Be sure to check the information on the form. Make sure it’s right. If anything looks wrong, contact the Marketplace Call Center.

Use Form 1095-A information to complete your tax return

You don’t file Form 1095-A with your taxes. Instead, you use the information on the form to complete your federal income tax return.