Now that the Affordable Care Act (ACA, or “ObamaCare”) has been in full swing for over a year, with two cycles of signup, you may have had occasion to wonder just how does ObamaCare affect your and your ex-spouse’s obligations to keep your child on your health insurance policy, or to otherwise provide health insurance for your child or children. Here’s how.
How ObamaCare Affects Divorced Parents and Their Children
The answer to the question of who is responsible for insuring a child whose parents are divorced is convoluted.
The Affordable Care Act requires that the parent who claims the exemption for the child provide proof of health insurance.
HOWEVER, if the child is not insured, it is the custodial parent who will be fined for the child being uninsured.
So, in a situation where mom has primary custody, but dad gets to claim the exemption (and remember that unless there is an order, or at least an agreement stating otherwise, the Federal exemption always goes to the custodial parent regardless of how much support the non-custodial parent is paying), dad will be responsible for providing proof of health insurance for the child or children, but if he doesn’t, and if as a result the children have no health insurance (or at least proof of health insurance), mom will be fined by the Feds.
This means that if you are operating on a pre-2014 parenting time and/or child support order, these new rules may impact you in ways you’d not anticipated.
For example, many divorced parents have the exemptions written into their orders such that they alternate the years in which each parent takes the exemption (i.e. dad takes the Federal exemption on odd years, and mom takes it on even years), or, if there is more than one child, they may split the exemptions (dad takes the exemption for little Sally, and mom take the exemption for little Harry).
Moreover, many court orders provide that one parent or the other is required to provide health insurance (particularly if one of the parents has employer-provided insurance), and it may be the case that the parent who is providing the insurance is not the parent who gets to claim the exemption.
So, what are parents in these situations supposed to do?
Here’s the bottom line: If you are claiming the exemption, you need to provide proof of health insurance coverage when you file your taxes.
If your child is covered on employer-provided insurance:
If your child or children are covered on employer-provided health insurance, that will be indicated on the W-2 form issued by that employer to the employed parent, in Box 12.
What if you are claiming the exemption, but your child is covered under their other parent’s employer-provided health insurance? You’d better get a copy of their W-2 (ask nicely – this is just one more reason why cooperative co-parenting is so important – and suggest that they first cross out their income and tax amounts, so that they don’t object because they don’t want you that deep into their business (even though they had to make that information available when you were calculating support)), and include that with your tax return.
If your child is covered by private insurance:
If your child is covered by private insurance, then your insurance provider will provide you with IRS Form 1095-B for proof of insurance. If you do not receive this, be sure to ask for it.
If your child is covered through the Health Insurance Marketplace:
If your child is covered through the Health Insurance Marketplace (HIM), the HIM will provide you with IRS Forum 1095-A for proof of insurance (and in theory will also transmit form 1095A directly to the IRS, but do not rely on that – attach a copy to your tax return yourself).
What if you are the custodial parent, and the children are covered on the non-custodial parent’s policy? You still need to get that W-2, or 1095-B, from your child’s other parent, and provide it on your taxes, if you are claiming the exemption.
One last note: If you are covering the children on your health insurance, and your ex is claiming the exemption for a given year, take the high road, and offer the proof of insurance to your ex before they have to ask you.