When tax season rolls around, there are many forms and documents you need to collect, and if you purchased health insurance through Covered California, one of those forms is the 1095-A. What does that mean for you?

Brendan Carberry

Covered CA Certified Agent

Published August 15th, 2023

Also known as the “Covered California Statement.” It’s a critical piece of the puzzle when you’re filing your federal income tax return. Here’s why you need your Form 1095-A and how it affects your taxes:

1. Reporting Your Health Coverage Under the Affordable Care Act (ACA), you’re required to have qualifying health coverage, qualify for a coverage exemption, or pay a fee with your federal income tax return for the months without coverage or an exemption. Form 1095-A serves as proof of your insurance and shows that you met the ACA requirements for coverage.

2. Premium Tax Credit Reconciliation If you received a premium tax credit to help pay for your health insurance, you must “reconcile” the credit you received with the actual amount you qualified for based on your final income. Form 1095-A provides the information you need to perform this reconciliation on IRS Form 8962. Failing to reconcile your premium tax credits could result in a delay in your tax refund or limit your ability to get premium tax credits in the future.

3. Calculating Your Actual Credit Your eligibility for the premium tax credit depends on your income and family size. If your income was lower or your family size larger than what you estimated when you applied for health insurance, you might be entitled to an additional credit. Conversely, if your income was higher or your family size smaller, you might have to repay some or all of the excess credit you received. Form 1095-A provides the data necessary for these calculations.

4. Verifying Your Coverage Form 1095-A includes important details about your health coverage, such as the start and end dates of your coverage, the premium amount, and the advanced premium tax credit you received. It’s essential to verify this information for accuracy. If there are any errors on your Form 1095-A, you should contact the Health Insurance Marketplace to get a corrected form.

5. Keeping Records for Future Reference While you do not attach Form 1095-A to your tax return, you should keep it with your tax records. It’s a vital record of your health insurance coverage and the premium tax credits you received, which could be important for future tax filings or in case of an audit.

Conclusion Form 1095-A is more than just another tax form. It’s a crucial document for proving your health insurance coverage, reconciling your premium tax credit, and verifying the accuracy of your health insurance information. So, when tax season arrives, make sure to have your Form 1095-A on hand and use it to ensure that your tax return is complete and accurate.