Determining Origin of Health Coverage for IRS Form 1095-B

Health insurance issuers and carriers must file Form 1095-B for most health coverage. When completing Form 1095-B, you will need to identify the Origin of Health Coverage being reported on Line 8 of the Form 1095-B.

1095 B Line 8
Image of Form 1095-B Part I – Line 8 Highlighted (Enter letter identifying Origin of Health Coverage)

The Origin of Health Coverage is indicated using one of the seven IRS designated codes. The Origin of Health Coverage codes are as follows:

  • A. Small Business Health Options Program (SHOP).
  • B. Employer-sponsored coverage, except for an individual coverage HRA.
  • C. Government-sponsored program.
  • D. Individual market insurance.
  • E. Multiemployer plan.
  • F. Other designated minimum essential coverage.
  • G. Employer-sponsored coverage that is an individual coverage HRA (ICHRA).

What are the Origin of Health Coverage Codes?

A. Small Business Health Options Program (SHOP)

Use this code to indicate that the coverage for employees was obtained through the Small Business Health Options Program (SHOP).

B. Employer-sponsored coverage, except for an ICHRA

This code indicates a minimum essential coverage plan sponsored by the employer, including:

  1. Group health insurance coverage for employees under:
          a. A governmental plan, such as the Federal Employees Health Benefits program.
          b. An insured plan or coverage offered in the small or large group market within a state.
          c. A grandfathered health plan offered in a group market.
  2. A self-insured group health plan for employees. Generally, an HRA, including an ICHRA, is a self-insured group health plan.

It should be noted that minimum essential coverage does not include coverage consisting solely of excepted benefits such as vision and dental coverage that are not part of a comprehensive health insurance plan; workers’ compensation coverage; and/or coverage limited to a specified illness or disease.

It is the responsibility of plan sponsors to report self-insured employer coverage. Employers subject to the employer shared responsibility provisions will generally report the coverage using Form 1095-C.

C. Government-sponsored coverage

Generally, the government agency sponsoring the program that provides coverage will file Form 1095-B.

According to the IRS, the following government-sponsored programs are considered minimum essential coverage:

  1. Medicare Part A
  2. Medicaid, except for the following programs:
          a. Optional coverage of family planning programs.
          b. Optional coverage of tuberculosis-related services.
          c. Coverage of pregnancy-related services.
          d. Coverage of medical emergency services.
          e. Coverage of medically needy individuals.
          f. Coverage of COVID-19 testing and diagnostic services.
  3. The Children’s Health Insurance Program (CHIP).
  4. The TRICARE program, except for the following options:
          a. Coverage on a space-available basis in a military treatment facility for individuals who are not eligible for TRICARE coverage for private sector care.
          b. Coverage for a line of duty-related injury, illness, or disease for individuals who have left active duty.
  5. Coverage administered by the Department of Veterans Affairs that is:
          a. Coverage consisting of the medical benefits package for eligible veterans.
          b. CHAMPVA.
          c. Comprehensive health care for children suffering from spina bifida who are the children of Vietnam veterans and veterans of covered service in Korea.
  6. Coverage for Peace Corps volunteers.
  7. The Nonappropriated Fund Health Benefits Program of the Department of Defense.

The Department of Health and Human Services has also designated the following health benefit plans or arrangements as minimum essential coverage:

  1. Medicare Part C (Medicare Advantage).
  2. Refugee Medical Assistance.
  3. Coverage provided to business owners who aren’t employees.
  4. Coverage under a group health plan provided through insurance regulated by a foreign government if:
          a. A covered individual is physically absent from the United States for at least 1 day during the month; or
          b. A covered individual is physically present in the United States for a full month and the coverage provides health benefits within the United States while the individual is outside the United States.
  5. The Basic Health Program.
  6. Coverage of pregnancy-related services that consists of full Medicaid benefits.
  7. Specific programs listed at here.

D. Individual market insurance

This can be a qualified health plan that was purchased through the health insurance marketplace or individual health coverage that was purchased directly from an insurance company.

E. Multiemployer plan

This is a group health plan that is sponsored by two or more employers, typically through a union.

F. Other designated minimum essential coverage

These are other plans and programs that the Department of Health and Human Services accepts as MEC for ACA reporting purposes.

G. Employer-sponsored coverage that is an ICHRA

An Individual Coverage Health Reimbursement Arrangement (ICHRA) plan is a type of health reimbursement arrangement that allows employers to reimburse employees, tax-free, for individual health insurance.

Next Steps

Once you have identified the correct Origin of Health Coverage code to be used, you can:

Or you can learn more about Form 1095-B and become a master at ACA reporting using our downloadable PDF Guide below.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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