UBP blog

01/19/2010

“Important Tax Document Enclosed”, now what?: FAQs on the 1099-HC and how to use it

Massachusetts requires all residents to have Minimum Credible health insurance Coverage or face a tax penalty. That’s why every year all employees covered on your health plan in the past year receive a 1099-HC.

Employees will get their 1099-HC forms in the mail this month and will use them to report their health insurance coverage on the Schedule HC form.

Since many Massachusetts employers will be entertaining employees’ questions on what to do with this “Important Tax Document Enclosed”, we’ve put together a few 1099-HC FAQs to help them out.

What is the 1099-HC form?

The 1099-HC is a required document for adult Massachusetts residents. It serves as proof that they had Minimum Credible Coverage* health insurance in the past year. 

*Effective January 1, 2009, all health plans sold in Massachusetts are required to meet the Minimum Credible Coverage standards set forth by the Commonwealth Connector.

Who will receive the 1099-HC?

All Massachusetts adult health insurance plan subscribers who had Minimum Credible Coverage in 2009 will receive the 1099-HC.  Medicare recipients automatically meet the requirements for qualifying health insurance and will not receive the 1099-HC.

Why will I receive the 1099-HC?

Using a Schedule HC form, Massachusetts residents are required to report on their health care coverage when filing their 2009 income tax returns. The 1099-HC contains all the information adult Massachusetts residents need to complete the Schedule HC.

When will I receive my 1099-HC and how will I know I’ve received it?

Health plan subscribers’ 1099-HC forms will be postmarked by January 31, 2010. The form will come directly from your health insurance carrier and the envelope will have the words “Important Tax Document Enclosed” written on the front.

What information will be printed on the 1099-HC for the 2009 tax year?

Your 1099-HC form will contain the following information:

  • Name of your Health Insurance Company
  • Federal Tax ID for your Health Insurance Company
  • Subscriber Name
  • Subscriber Date of Birth
  • Subscriber Member ID
  • Subscriber’s Address
  • Full-year coverage or monthly coverage designation *
  • Dependent (s) Name (s)  
  • Dependent (s) Date (s) of Birth
  • Dependent (s) Member ID (s)
  • Full-year coverage or monthly coverage designation for each listed subscriber and dependent*

*If you and your dependent(s) had Minimum Credible Coverage for the full year of 2009 the “Full Year Minimum Credible Coverage” box will be checked on the 1099-HC for you as well as all of your dependents. Otherwise, a check mark will appear next to each month that you or any of your dependents had Minimum Credible Coverage for 15 days or more.

What must I do with my 1099-HC?

If you are filing a hard copy (paper) return, your 1099-HC should be included in your tax return mailing. You should also keep a copy of it for your records.

If a tax advisor is preparing your 2009 income tax return, he or she should be provided the 1099-HC form along with your other records.

When and where can I get a copy of my Schedule HC tax form? Also, how do I complete the Schedule HC?

All Massachusetts residents should receive a Schedule HC as part of the resident tax package mailed to them. If any of your employees need an additional copy, they can visit the Massachusetts Department of Revenue’s website (http://www.state.ma.us/dor) where they’ll also find instructions on how to complete the form.

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