Questions Part III: Affordable Care Act and Families
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- Questions Part I: Training
- Questions Part II: Permissible Guidance Questions
- Questions Part III: Affordable Care Act and Families
- Questions Part IV: Penalties
- Questions Part V: Premium Tax Credits
- Questions Part VI: Other General Questions
Many non-custodial parents claim children every other year. How will the premium tax credit work in that case?
The availability of the premium tax credit will always travel with the taxpayer who is claiming the child’s exemption. If the custodial parent is claiming exemption for the child in 2014, the custodial parent would be eligible to get premium tax credit on the child’s behalf that year. But in 2015, when the non-custodial parent was claiming exemption, the non-custodial parent would be eligible to get the premium tax credit on the child’s behalf. This doesn’t necessarily mean that the child needs to switch health plans; both parents could continue to enroll the child in the same plan year after year, if they prefer. But the person who is eligible for the child’s exemption is the only one who may receive the premium tax credit for the child.
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Can a child go on and off Medicaid based on the income of the parent who is claiming exemption?
Medicaid eligibility rules are different from premium tax credit eligibility rules when a child’s parents live apart. Medicaid eligibility is always assessed first. For Medicaid purposes, a child’s household includes the custodial parent, a step-parent (if any) and the child’s siblings living in the home, regardless of which parent claims the child for tax purposes. If the child is found to be ineligible for Medicaid, their eligibility for premium tax credits is assessed. For premium tax credit purposes, the child will be in the household of the parent who lawfully claims their exemption, regardless of where the child lives.
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How would a child stay on the same plan if the parents have different plans?
Often, it’s economical for a child to enroll in a parent’s employer-sponsored insurance plan. In fact, if a child is eligible for insurance through a parent’s job or for Medicaid or other government insurance, that child is not eligible for premium tax credits. But if those options aren’t available or if the parents want to purchase a policy for the child without a subsidy, the child can be enrolled either with a parent or in his or her own policy.
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At what age is an individual considered ann adult (rather than a child) for the purpose of calculating the penalty for failure to have coverage?
The penalty assessed to the taxpayer for a child who is uninsured is one-half the amount owed for an uninsured adult. For the purpose of calculating the penalty, a “child” is someone who is under the age of 18.
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Is it true that if an employee has employer insurance, their spouse cannot get the premium tax credit?
In order to qualify for premium tax credits, you cannot have an affordable offer of employer-sponsored health insurance. When one spouse is offered affordable employer-sponsored insurance (self-only coverage that costs less than 9.5% of family income) that meets a few minimum standards, and if that employer offers coverage for a spouse, then the other spouse is considered to have an affordable offer of coverage, too. This is true even if spousal coverage is a lot more expensive and the total cost of coverage is greater than 9.5% of family income. However, if the employer doesn’t offer a family plan, which is true in some low-wage jobs, the employee’s spouse could get premium tax credit if they’re otherwise eligible.
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