Taxes and reporting
The federal Affordable Care Act (ACA) requires that all taxpayers confirm that they had minimum essential health coverage,* unless they were granted an exception. Otherwise, they will be required to pay a tax penalty.
What is the minimum essential coverage?
Minimum essential coverage (MEC) is the type of coverage an individual needs to have to meet the ACA individual responsibility requirement.* This includes individual policies, job-based coverage, Medicare and Medicaid, a state Children’s Health Insurance Program (CHIP), TRICARE (healthcare program for service members and families), and other types of ACA-compliant coverage.
Qualifying health plans through Blue Shield
The following types of coverage meet the federal requirement:*
- Health coverage provided by your employer through Blue Shield (including COBRA)
- Health coverage purchased directly from Blue Shield
- Health coverage purchased through the health insurance marketplace in the area where you live (Covered California is the marketplace for California residents)
- Coverage provided under a government-sponsored program such as Medicare Advantage
- Grandfathered health plans through Blue Shield
- Other health coverage recognized as MEC by the U.S. Department of Health and Human Services
Reporting MEC coverage on your tax form*
For plan years 2015 through 2018, the IRS requires you to report on your tax returns whether or not you had minimum essential coverage (MEC) throughout the year. If you have health coverage with Blue Shield of California—either through your employer, from Covered California, or by buying it directly from Blue Shield—you meet the requirement for minimum essential coverage (MEC) for that month. All members who receive health coverage for any month of the plan year will receive a 1095-B form from Blue Shield of California. Under certain plans where the employer “self-funds” the health plan, you will receive the 1095-B form from your employer.
Follow guidelines and respect policy
In the past, you may not have needed to provide a Social Security number (SSN) to enroll in health insurance. Although an individual is not required to provide an SSN to receive health coverage, providing an SSN will help with information tax reporting. Blue Shield of California will identify members whose SSNs we do not have on file and request it directly from you.
While we respect each individual’s right to privacy, we are required by law to attempt to collect this information. If you choose not to provide your SSN, we will not refuse or cancel your coverage. You may be subject to a $50 penalty imposed by the IRS if you fail to provide correct tax ID numbers.
The IRS has released helpful information about individual, employer and insurer reporting obligations under the ACA’s MEC mandate. To learn more about how to report your MEC coverage information on IRS forms, visit the IRS page on individual shared responsibility provision.
Your tax professional can provide the best information about the documents needed to demonstrate coverage.
*For plan years 2015 through 2018, anyone who did not enroll in a plan that meets minimum essential coverage requirements will have to pay a fine to the government. Starting with the 2019 plan year (April 2020 tax filing date), the fine no longer applies.