In a recent "tax tip," the IRS pushed out on the 1095 forms, an item for Form 1095-C issued by "applicable large employers" to their full-time employees, caught my attention (again). One of the ways the IRS tells a recipient of Form 1095-C to use it follows:
"If you enrolled in a health plan through the Marketplace, the information in Part II of Form 1095-C could help determine if you’re eligible for the premium tax credit. If you did not enroll in a health plan through the Marketplace, this information is not relevant to you."
Part 2 of the 1095-C states what the cost is of the lowest cost insurance plan an employer offered. When an employer offers a plan that is "affordable" (for 2015, the cost was no greater than 9.56% of the employee's household income), the employee is not eligible for a Premium Tax Credit, assuming they even buy health insurance through the Marketplace.
A problem is that many people don't know what their household income will be until the end of the year (or soon thereafter). Why? Consider these things that might happen during the year:
- You get a higher paying job or extra hours.
- You get a year-end bonus.
- You win the lottery or do well in Vegas at the slots.