ACA when # of dependents changes?

[qwerty3656]

Has anyone had a change in dependents while on ACA? I'm planning to use ACA for the 1st time next year and I also have a senior in college. Hopefully, he graduates next May and gets a job. For premiums, eligibility, etc, not sure if I have 2 dependents or 3 (or some hybrid)?

 

[sengsational]

It's what will be on your 1040. No pro-rated portion of a kid.


And what's on your 1040 is basically did you pay more than 50% of their expenses (a million rules below that, so the IRS documentation is good if splitting hairs on that).

 

[Aerides]

You would plan for the year with him on your ACA, then apply for a change in status if/when he drops off after gaining other insurance.

 

[sengsational]

My earlier post is about the PTC calculation, BTW. You get what you get in that calculation, irrespective of whether the dependent uses ACA coverage or not. I found it much easier to take the University's health insurance. It was cheap, low deductible, and integrated with free "campus health". The campus insurance kept going after graduation long enough to bridge to the new-hire corporate insurance.

 

[Yipper]

Has anyone had a change in dependents while on ACA? I'm planning to use ACA for the 1st time next year and I also have a senior in college. Hopefully, he graduates next May and gets a job. For premiums, eligibility, etc, not sure if I have 2 dependents or 3 (or some hybrid)?

Would you consider keeping your college senior on your insurance for a while longer (up to age 26 is still possible I believe)? I'm thinking this would do two things - reduce the burden of healthcare contributions from your child in their earliest years and the extra dependent might increase your ACA subsidy and may make the cost essentially flat... at least until things change in the future and you could make the call at that point whether to "kick them off" your plan.

 

[qwerty3656]

My earlier post is about the PTC calculation, BTW. You get what you get in that calculation, irrespective of whether the dependent uses ACA coverage or not. I found it much easier to take the University's health insurance. It was cheap, low deductible, and integrated with free "campus health". The campus insurance kept going after graduation long enough to bridge to the new-hire corporate insurance.

Wow - I didn't even know University health insurance was an option - here I am with my last kid in his senior year.

 

[qwerty3656]

Would you consider keeping your college senior on your insurance for a while longer (up to age 26 is still possible I believe)? I'm thinking this would do two things - reduce the burden of healthcare contributions from your child in their earliest years and the extra dependent might increase your ACA subsidy and may make the cost essentially flat... at least until things change in the future and you could make the call at that point whether to "kick them off" your plan.

So you can do even if he has other insurance available?

 

[qwerty3656]

You would plan for the year with him on your ACA, then apply for a change in status if/when he drops off after gaining other insurance.

So presumably there would be a big make-up payment at that time (no partial year credit for a kid)?

 

[Yipper]

So you can do even if he has other insurance available?

Absolutely. Just had my youngest graduate college a few months ago and I'm keeping her on our insurance for a while even though her new Megacorp job has decent insurance. We kept her two older siblings on our insurance until they hit 26 since my Megacorp plan charges the same no matter how many dependents I have.

I'm able to retire now and may pull the plug at anytime once my BS bucket runs over (it's getting VERY close ) and I've priced out COBRA and ACA plans and for ACA and my expected income the subsidy would increase enough to cover just about all of the additional cost for DD.

I also feel like my retiring before the youngest is 26 isn't quite fair since we covered healthcare costs for the older two for that period.

 

[cathy63]

So you can do even if he has other insurance available?

You can keep a child on your ACA plan until the end of the year in which he reaches the maximum age in your state, which may be higher than 26, even if he has other insurance available.

You can keep a child on your group plan that you get through your employer or union until the month in which he reaches the max age for your state. (The plan can allow for longer coverage, but most don't.) In this situation, the child may also be eligible for COBRA coverage after he's no longer able to stay on your plan, but for a young adult, COBRA is usually a lot more expensive than an ACA plan.

 

[cathy63]

So presumably there would be a big make-up payment at that time (no partial year credit for a kid)?

No, you will both file form 8962, and you will allocate the premium costs between your two returns and report to the IRS how you divided them. You should sit down and do your taxes together (or have the same tax preparer do them at the same time) so that the numbers match up.

If your son drops off your ACA plan mid-year, then you would need to go into the exchange and adjust your expected family income and family size. Doing that will change your premium and subsidy amounts for the rest of the year, but you won't have to repay any subsidy you've already received right then. It will all be worked out on the tax returns.

The "no partial year credit" is for claiming him as a dependent, not for getting a subsidy on health care. And in this situation, he may be your dependent anyway. If you are paying for school and he doesn't start a new job until July or later, it's likely that he's going to meet the dependent test and you should claim him. If that happens, he would have to check the box that says he "can" be claimed as a dependent, even if you don't, so you'd be throwing away the credit. This is another good reason to have the two tax returns done together and make sure they match.