Essential Health Insurance Tax Forms Explained
March 17, 2025 | Tags:
Health Savings Accounts (HSAs) and Group Health Insurance plans are essential tools in managing healthcare costs, offering individuals and employers a way to save money and receive medical coverage.
Understanding the tax forms associated with these tools is crucial when it comes to adhering to tax regulations and maximizing financial benefits. Medical Mutual is here to help educate how these accounts and plans work, along with the necessary tax forms to ensure smooth financial planning. In this article, we will discuss the three most common forms related to your health coverage and taxes. If you have questions about your specific situation, it is best to consult a qualified financial professional, such as a Certified Public Accountant (CPA).
What are HSAs?
HSAs are tax-advantaged accounts designed to help individuals save and pay for qualified medical expenses. They are available to people who have a high-deductible health plan (HDHP).
Contributions to an HSA are made with pre-tax dollars, reducing taxable income and the funds in the account grow tax-free. Additionally, withdrawals for eligible medical expenses are also tax-free.
One of the key benefits of an HSA is that the funds roll over year after year, unlike Flexible Spending Accounts (FSAs), which may have a “use-it-or-lose-it” policy. HSAs can also be used to save for future medical expenses, including those in retirement. This makes HSAs a powerful tool for managing healthcare costs, both now and in the future.
Learn more about HSAs here.
What tax forms do I need to file with an HSA?
- Form 1099-SA is used to report any distributions made from the HSA during the tax year. It is used to calculate potential taxable income, penalties or any tax owed if the distribution was not used for qualified medical expenses.
- Distributions for qualified medical expenses are generally tax-free. However, if you use the funds for non-qualified expenses, the amount will be subject to regular income tax and a 20% penalty if you're under the age of 65.
- If you’re 65 or older, you can use the funds for any purpose without a penalty, though it will still be taxable if used for non-medical expenses.
- Form 5498-SA is used to report contributions made to an HSA during the tax year. It helps you determine your tax deductions for these contributions.
- Contributions to an HSA are tax-deductible and may reduce your taxable income.
- There are annual contribution limits — exceeding the contribution limits can lead to penalties.
What is group health insurance?
Group health insurance provides coverage to a group of individuals. It allows the cost of premiums to be shared among the group, which often results in lower costs for participants compared to individual health insurance plans. The employer or organization usually negotiates the insurance plan and participants may be able to select from a variety of coverage options. It often offers benefits such as preventive care, medical services and prescription drug coverage, and may also include additional incentives such as wellness programs.
What tax forms will I receive if I have group health insurance?
Form 1095-C is used by employers with 50 or more full-time employees to report the health insurance coverage they offer to their employees under the Affordable Care Act (ACA). This form helps determine whether an employee is eligible for a premium tax credit under the ACA and provides details about the health insurance coverage offered to the employee and their dependents.
- You will use Form 1095-C to confirm that you had health insurance coverage that meets the ACA requirements. If you did not have insurance or your insurance did not meet the ACA’s standards you may have to pay a penalty, unless you qualify for an exemption. The federal penalty ended in 2018, but some states still have mandates and may impose penalties.
- If you didn’t have employer-sponsored coverage and purchased insurance through the Health Insurance Marketplace, Form 1095-C helps you determine whether you qualify for a premium tax credit.
- While Form 1095-C is not required to be filed with your tax return, you should keep it with your tax records to ensure that you can verify your health coverage status when filing.
For Medical Mutual Group Health Plan Members:
- Access your 1095-C tax form by logging into your My Health Plan account. From the “Benefits & Coverage” menu at the top of the page, click “Tax Reporting.” You will be taken to a page where you can download a digital copy of your 1095-C form. Members may also receive a 1095-C form from their employer.
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Members who have an email address on file will receive an email which directs them to My Health Plan, where they can locate their 1095-B form. This form, provided by the health insurance company, shows the months of qualifying coverage.
Medical Mutual is here for you
HSAs and group health insurance plans provide valuable opportunities to manage healthcare expenses while benefiting from tax advantages. Understanding the related tax forms is key to making the most of these options. At Medical Mutual, we are committed to simplifying the process for you by offering expert guidance, tailored solutions and a range of plans that best meet your needs.
Medical Mutual is here to help you take charge of your own health. For more information, contact our Customer Care team at the number on your member ID card.