You May Have to Provide Your Social Security Number to Your Health Insurance Company

Larry Villano, Publisher of Loopholelewy.com

Your health insurance company may request that you provide them with the social security numbers for you, your spouse and your children covered by your policy. This is because the Affordable Care Act requires every provider of minimum essential coverage to report that coverage by filing an information return with the IRS and furnishing a statement to covered individuals. The information is used by the IRS to administer – and individuals to show compliance with – the health care law.

Form 1095-B, Health Coverage:

Health coverage providers will file an information return, Form 1095-B, Health Coverage, with the IRS and will furnish statements to you in 2016, to report coverage information from calendar year 2015.

The law requires coverage providers to list social security numbers on this form. If you don't provide your SSN and the SSNs of all covered individuals to the sponsor of the coverage, the IRS may not be able to match the Form 1095-B with the individuals to determine that they have complied with the individual shared responsibility provision.

Your health insurance company may send a letter that discusses these new rules and requests social security numbers for all family members covered under your policy.

The IRS has not designated a specific form for your health insurance company to request this information. The Form 1095-B will provide information for your income tax return that shows you, your spouse, and individuals you claim as dependents had qualifying health coverage for some or all months during the year.

You do not have to attach Form 1095-B to your tax return. Keep it with your other important tax documents.

The information received by the IRS will be used to verify information on your individual income tax return. If you refuse to provide this information to your health insurance company, the IRS cannot verify the information you provide on your tax return and you may receive an inquiry from the IRS. You also may receive a notice from the IRS indicating that you are liable for a shared responsibility payment.

Individual Shared Responsibility Payment (additional tax):

Anyone on your return who does not have minimum essential coverage, and who does not qualify for an exemption, may be liable for the individual shared responsibility payment.

The individual shared responsibility provision requires you and each member of your family to do one of the following:

  • Have qualifying health coverage called minimum essential coverage;
  • Qualify for a health coverage exemption,
  • Make a shared responsibility payment when you file your federal income tax return.

Many people already have minimum essential coverage and do not need to do anything more than maintain that coverage and report their coverage when they file their tax returns

Minimum essential coverage includes:

  • Most health insurance coverage provided by your employer
  • Health insurance purchased through the Health Insurance Marketplace in the area where you live, where you may qualify for financial assistance
  • Coverage provided under a government-sponsored program for which you are eligible - including Medicare, Medicaid, and health care programs for veterans
  • Health insurance purchased directly from an insurance company
  • Other health insurance coverage that is recognized by the Department of Health & Human Services as minimum essential coverage.

Exemptions:

If you meet certain criteria for a tax year, you may be exempt from the requirement to have qualifying health coverage. If you are exempt, you will not have to make a shared responsibility payment when you file your federal income tax return. For any month that you do not qualify for a coverage exemption, you will need to have minimum essential coverage or make a shared responsibility payment.

How you get an exemption depends upon the type of coverage exemption for which you are eligible. You can obtain some exemptions from the Marketplace or claim them on your tax return. You will report an exemption obtained from the Marketplace when you file your tax return.

You may be exempt if you meet one of the following:

  • The minimum amount you must pay for the annual premiums is more than eight percent of your household income
  • You have a gap in coverage that is less than three consecutive months
  • You qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group explicitly exempt from the requirement

For any month during the year that you or any of your dependents don’t have minimum essential coverage and don’t qualify for a coverage exemption, you will need to make an individual shared responsibility payment with your tax return.

In general, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace. You will owe 1/12th of the annual payment for each month you or your dependent(s) don’t have either coverage or an exemption.

If you did not have coverage and your income was below the tax filing threshold for your filing status (Single, Married Filing Jointly, etc.), you qualify for a coverage exemption and you are not required to make a payment. You do not need to file a return solely to claim this exemption.

If you choose to file a tax return, you should not make a payment with your return but should complete Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return, to claim the coverage exemption.

If you must make a payment, you can use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due.

For more information about determining the amount and reporting your payment on your tax return, see our Reporting and Calculating the Payment page. To estimate the amount of individual shared responsibility payment you may owe, see the shared responsibility payment estimator.