Affordable Care Act And Child Support Judgments

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Massachusetts laws regarding the care, custody and maintenance of children of divorcing or never-married parents specifically address the issue of health insurance, presumptively placing the burden of providing health coverage for an unemancipated child or children on the person who is obligated to pay child support. The statute applying to children of divorcing parents (Massachusetts General Laws Chapter 208 Section 28) and the statute applying to children of never-married parents (Massachusetts General Laws Chapter 209C Section 9) each state as follows: “When the court makes an order for maintenance or support of a child, said court shall determine whether the obligor under such order has health insurance or other health coverage on a group plan available to him through an employer or organization or has health insurance or other health coverage available to him at a reasonable cost that may be extended to cover the child for whom support is ordered. When said court has determined that the obligor has such insurance or coverage available to him, said court shall include in the support order a requirement that the obligor exercise the option of additional coverage in favor of the child or obtain coverage for the child.”

Further, the Massachusetts Child Support Guidelines specifically address the issue of which parent may claim a child as a dependent for tax purposes. Although IRS Guidelines generally provide that the parent whom the child has lived with more than 50% of the time during the tax year (the custodial parent) may claim the child as a dependent (unless that parent specifically agrees to allow the non-custodial parent to claim the child), in setting a support order, the Probate Court “may make an order regarding the claims of personal exemptions for child dependents between the parties to the extent permitted by law”. Because a variety of factors impact how the child dependency exemptions will be awarded or shared, in some cases the custodial parent will claim the child, in others the non-custodial parent will claim the child, in others the parents will share the exemptions (each claiming one child) and in others they may alternate claiming the child in different years. As a result, the parent that claims the child or children as a dependent for tax purposes is often not the same parent that provides health insurance for the child(ren).

While the passage of the Affordable Care Act (ACA), or “Obamacare” has created plenty of fireworks in Washington, it remains unclear how certain provisions of the Act may impact divorced and never-married families in Massachusetts. One aspect to consider is that the ACA obligates the parent who claims the child as a dependent for tax purposes to provide proof that the child is insured – and imposes penalties on this parent for failing to do so. According to the IRS website “the adult…who can claim a child… as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.”. Although the ACA does not seem to require that the parent claiming the child as a dependent be the one to actually provide the coverage (just proof of coverage), it is clear that the claiming parent will be the one to face penalties should he/she fail to do so. As such, court orders, judgments and agreements must now ensure that the parent providing medical insurance coverage for the child timely gives proof of same to the parent claiming the child as a dependent.

While incorporating such a provision in orders and judgments is fairly simple, it remains to be seen whether the ACA will have the greater impact of causing a shift in the burden of providing health insurance under our current statutory scheme, as absent court order to the contrary, it is now the custodial parent’s obligation to provide health insurance for any dependent child(ren).

Further, because the ACA expands Medicare to more families, provides for some tax credits to offset the cost of coverage, and allows insurance to be purchased on the exchanges, employer-provided healthcare may no longer be the most cost-effective option for many families. Judges, practitioners and self-represented litigants alike should all be cognizant of the variety of options now available and the costs associated with each.

Finally, although current Massachusetts law only obligates parents to provide health insurance for children through age 23 (at the latest), the ACA requires plans and issuers that offer dependent coverage to make such coverage available until the adult child reaches the age of 26. It certainly seems possible that this may cause an increase in the age limit set forth in our statutes. In sum, while it is too soon to determine with specificity what the changes will be, it can reasonably be expected that the ACA will have a far-reaching impact upon Massachusetts child support and health care orders in the not-so-distant future.


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