by George Ray
Even though Open Season has come and gone, you still have one more healthcare chore left over from 2017 that you’ll need to complete before filing your Federal Income Tax Return. That chore is obtaining and maintaining proof of your healthcare coverage.
You see the Affordable Care Act (yes, also referred to as Obamacare) put a requirement in place for every American (who could afford it, and some financial help for those who couldn't) to have healthcare coverage. It’s referred to as ‘minimum essential coverage’, and plans provided under the Federal Employees’ Health Benefits Program (FEHB) count toward the requirement. The Act even requires penalties for those who don’t have coverage, and despite the gyrations of Congress throughout 2017, the rule was still in effect. The new tax bill passed in December of 2017 repealed the mandate for coverage, but the rule won’t take effect until 2019. The penalty for going uncovered for 2018 will be $695 per adult or 2.5% of household income in excess of tax filing thresholds, whichever is higher.
To avoid the penalty, you'll need to have coverage for each month of the year (one day actually counts as having coverage for the month) and you’ll also need to let the IRS know that you have the required coverage. This is done when you file your tax return by simply checking the box that says ‘Full-year coverage’ on line 61 of the IRS Form 1040. You won’t need to file any additional forms with your return, but you will be receiving two forms for 2017 (by mail, or electronically if you consented) —one from your agency and one from your healthcare provider.
If you’re a full-time employee (regardless of whether you’re enrolled in FEHB, or whether you’re eligible for coverage) you’ll be receiving IRS Form 1095-C (PDF) from your agency sometime prior to March 2, 2018. The form will have your employing agency listed at the Department level (not the sub-agency level) and will include the cost of coverage by month (for each month that you were eligible to receive it). The 1095-C also includes information on individuals (like family members) who may be eligible for coverage or covered under the plan. Even if you didn’t enroll in FEHB coverage (maybe you chose your private-sector, employed spouse’s coverage instead), you’ll still receive the form indicating that you were offered coverage. If you have any questions about the information on the form (or if you don’t receive a copy), contact your agency’s Human Resources department.
Also prior to March 2nd, you’ll get another form. It’s required to be provided by your healthcare company — the FEHB provider you used in 2017 (just in case you changed providers for 2018). This form, the IRS Form 1095-B (PDF), will report information about the individuals enrolled in coverage under your plan for some or all months during the year. Your provider may even contact you for Social Security numbers (for you and any covered family members) so don’t be alarmed if this happens. Questions on this form (or if you don’t receive a copy) should be directed to your healthcare provider.
According to IRS Notice 2018-06, you don’t need to wait until you receive the forms to file your tax return because the forms aren’t required to be included with your filing. As long as you've had coverage under FEHB in 2017 (or other ‘minimum essential coverage’), you’ve met the requirement. So keep the forms for your records when they arrive and file them away. Now sit back and pour yourself a tall drink—something healthy, of course. You’ve just taken care of the last healthcare chore for 2017.