Dependent Coverage Under ACA Insurance: Unraveling the Complexities

The Affordable Care Act (ACA) has made significant strides in expanding health insurance coverage to millions of Americans. However, understanding the intricacies of the law can be challenging, especially when it comes to dependent coverage. In this blog, we will delve into the complexities of dependent coverage under ACA insurance, using a real-life case as a starting point.

The case in question involves a family with three members: a father, a mother, and a 21-year-old son who is studying and working. The family was enrolled in an ACA insurance plan together, and they received a shared 1095-A form. The question arises: how should this family file their taxes considering the shared 1095-A form?

Dependent Eligibility Under ACA

Determining if the son can be claimed as a dependent is crucial for tax purposes. According to the IRS guidelines, a qualifying child must meet certain criteria, including being under the age of 19 or being a full-time student under the age of 24. Additionally, the child cannot provide more than half of their own financial support and must have lived with the parents for more than half of the year.

In this case, since the son is 21 years old and a full-time student, he meets the age and student status requirements. However, it is important to assess whether he provides more than half of his own financial support. If he does not, then he can be considered a qualifying child.

Filing Taxes with a Shared 1095-A

Regarding the shared 1095-A form, the parents will use the form on their tax filing. The son, if required to file, should include his income in the household income figure used on their Form 8962. However, he will not fill out a Form 8962 or use the 1095-A on his own tax filing.

Additional Considerations

Health Insurance Premiums: The parents can claim the son’s health insurance premiums as part of their tax credit. The son cannot claim these premiums on his own tax return if he is considered a qualifying child.

Income Thresholds: The eligibility for premium tax credits and cost-sharing reductions under ACA is based on household income. The son’s income will be included in the household income used to determine eligibility.

Special Enrollment Period: If the son loses dependent coverage, he may qualify for a special enrollment period to obtain health insurance on the Marketplace.

Understanding the complexities of dependent coverage under ACA insurance can be daunting. However, by carefully considering the eligibility criteria and following the guidelines outlined in this blog, you can ensure that your family receives the coverage and benefits they are entitled to. If you have further questions or require assistance, it is highly recommended that you seek professional advice from a licensed agent who specializes in ACA health insurance.