Unmarried Couple with Child, ACA Rules Appear to Make Household

[yorkriver1]

Just re-read this on Marketplace website, and considering how including the partner would work, since they don't seem to need to file jointly or have one partner as a tax dependent, as long as they live together and have their bio child in H/H, see below. Tax dependent doesn't work, as the partner's income exceeds the IRS rule, which is in the low $3000's for dependent income.

"When filling out your application, include:

Yourself
Your spouse
Your children who live with you, even if they make enough money to file a tax return themselves
Anyone you include on your tax return as a dependent, even if they don’t live with you
Anyone else under 21 who you take care of and lives with you
Your unmarried partner, only if one (!) or both of these apply:
They are your dependent for tax purposes
They are the parent of your child"

They will actually spend more if not done this way, as one partner is taking time to care for the child, cut back on employment and makes less than the level needed in our state for a subsidy. They could lose CHIP for the child due to combined income, but would be able to have a subsidy for a net benefit to the household.

The client is willing to pay unsubsidized rate for the partner.

My concern is that these situations get complicated by the rules of IRS and Social Services, overlaid by ACA rules.

 

[RayNY]

"When filling out your application, include:

Your unmarried partner, only if one (!) or both of these apply:

They are the parent of your child"

If they don't have to be married, file jointly, or co-reside, simply be the parent of a child, wouldn't that mean that all the babymommas are counted towards household size? Some guy that knocked up 4 women and lives alone gets a household size of 5 because they are the parents of their children?

IRS Pub 501, cited on HC.gov as the supporting doc for that information, does not address who's included for subsidy household purposes, only tax-filing dependent purposes (pp17-19 for the part about children and married/unmarried parents). You're filing as single, but including the parents of your children for subsidy purposes from what I can tell from the HC.gov guidance, which would not qualify for tax purposes.

I can't find a reference that corroborates this anywhere. That HC.gov blurb is the only place I can find that definition. The NY exchange doesn't use that terminology, nor does any of my training or reference materials.

 

[yorkriver1]

The more important news here for me is that this doesn't seem to be a popular option I have overlooked. I don't want to disturb their arrangement with CHIP unless they decide they don't want it. We are going to revisit the situation next renewal.
Now to the technical interpretation part:
Each of those lines in the household income and size inclusion list stands alone, it seems to me. That would not include the parent of your child if the other parent is not living with you. Maybe if they were a tax dependent, see earlier line item about tax dependents.

 

[RayNY]

If they were a tax dependent, it's cut and dry, they're part of the household.

If they're not a dependent, don't live with you, but are a parent of your child (even if the child does not reside with you and isn't claimed as a dependent, just a legally shared child), it would appear they are a body in your household with no contribution to income for subsidy calculation purposes.

If that's true, it's a pretty big thing we all overlooked. I'm presuming it's a misprint until anything else turns up that says it. Have you tried contacting HC.gov so one of the reps can tell you they don't know anything after you're on hold for half an hour?

 

[Ann H]

That statement on hc.gov is most likely there for Medicaid and CHIP purposes.

For APTC you use the tax-filer rules, and only people who are on your tax return are considered part of your household.

Under Medicaid and CHIP, they use the same rules, but they have additional rules. Some of those are called "Relationship Based Rules" or "Non-Filer Rules" for people who qualify for Medicaid but do not plan to file a tax return. Under those 2 Medicaid and CHIP rules, an unmarried partner, who is the parent of your child, can be deemed to be part of your household.

http://www.statenetwork.org/wp-cont...ource-Guide-Household-Composition-General.pdf

http://www.cbpp.org/files/Household-Definitions-Webinar-7Aug13.pdf

http://www.medicaid.gov/State-Resource-Center/Downloads/3-29-12-Eligibility-Webinar-Slides.pdf

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By the way, it is possible for your unmarried partner to be a tax dependent on your tax return, too. But that doesn't change the fact that the APTC household size and MAGI income is only for the people that are on your tax return.