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2010 National Healthcare Law Relating to Family Law Matters

By: Ronald B. Sieloff

Unless the U.S. Supreme Court rules the new federal health care law unconstitutional, it is
repealed, or Congress does not fund it the Patient Protection and Affordable Care Act(P.L.
111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (P.L.
111-152) will, for the most part, go into effect in 2014.
It is now the law and to avoid nasty surprises, it is not too early for the bench, family law
attorneys, tax attorneys and other professionals to now consider the new law when
drafting orders, judgments and decrees and marital termination agreements.
A. This presentation does not cover the entire 2010 Federal Health Care Legislation.
Excluded topics are:
1. “Large Employer” (50 or more fulltime employees) mandates, subsidies and
penalties.
2. “Small Employer” (25 or less fulltime employees)with average annual
compensation between 25K to 50K eligible the 35% health insurance
premium tax credit.
NOTE: for both large and small employers in the year 2012 and in future years
health flexible spending arrangement (FSA) salary reduction plans for medical
expenses are capped at $2,500.00 per year adjusted for inflation commencing in
2014. Sieloff and Associates, P.A.
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3. Pharmaceutical, Medical Device, Health Insurance Taxes, Regulations and
Excise Tax on “Cadillac” Health Plans.
4. Medicare, Parts A (hospitalization), Part B (physicians, outpatient hospital
services and durable medical equipment), Part C (Medicare advantage plans
and the like), Part D (drugs).
NOTE: I have included with my materials Form SSA-44, revised May, 2010
which permits a request for reduction of Medicare Part B income related
insurance premium. For taxpayers with AGI of $85,000.00 ($170,000.00 for
joint returns) Medicare Part B premiums increase with income and can total
as much as 4 times the regular premium roughly paralleling the ratio of the
75% general revenue subsidy to Medicare over Medicare taxes. The 2010
regular (not grandfathered monthly rate of $96.40) monthly premium is
$110.50; plus maximum income based increase in monthly premium of
$243.10 = total monthly premium of $353.60.
Beginning in 2011, per P.L 111-148 § 3308 (a) the increased income adjusted
premium for Medicare Part D (Drugs) was added by the 2010 legislation using the
income thresholds for Medicare Part B. The average 2010 Medicare Part D
premium is $31.94 and the income adjusted premium could be as much as
$127.76.
When joint returns are filed, the lower income spouse could receive a massive
Medicare premium increase. Be careful. The Medicare Part B provision was
enacted into law prior to 2010. The Medicare Part D provision is new.
5. Many other miscellaneous provisions in the new legislation including new
IRS Form1099 reporting requirements for businesses, new requirements for
reporting health care payments on employees’ W2 and beginning in 2013,
the medical expense deduction threshold is increased from 7.5% to 10% of
AGI except for persons over age 65 which are grandfathered in until 2016.
6. New taxes in 2013.
a. .09% Medicare tax on wages and self employment income. Rate increase
is only on employee share on incomes over $200k/ $250k joint returns.
b. 3.8% Medicare tax on net investment income. Applies to incomes over
$200K/ $250K joint return. Includes interest, dividends, annuities,
royalties, rent and (capital gains?). Excludes IRA and qualified plan
distributions but they are included in base income in computing $200K/
$250K threshold.
B. This Presentation includes: Sieloff and Associates, P.A.
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The new Federal Health Insurance obligation imposed on individuals including the:
1. Mandate
2. Subsidy
3. Penalty
Obligations, Indemnity and Hold Harmless Agreement in Legal Separation and
Dissolution of Marriage Decrees. See Fast v. Fast 766 N.W2d 47 (Minn App 2009) and
their effect on medical insurance provisions in Judgments and Decrees.
YOUR QUESTIONS
The questions that you should now be asking in family law matters are:
1. Which party does federal law mandate to carry individual coverage for
children?
2. On whom will the penalty fall if it does not occur?
3. On which party’s income is the health insurance subsidy based?
4. How much is the subsidy?
5. What is the effect of the award of the right to claim the income tax dependency
exemption on the health insurance mandate, penalty and subsidy?
6. What is the bankruptcy law effect of including a heath insurance requirement
or an indemnification and hold harmless provision in a Judgment and Decree?
7. How should health insurance obligations, indemnification and hold harmless
provisions be modified if inserted in judgments, decrees and orders?
8. How does the new healthcare law interrelate with Minn. Stat. §518A.41 dealing
with medical support and, in particular, Minn. Stat §518A.41, subd. 4 relating to
“ordering health care coverage”?
9. Will the IRS use the allocation of the dependency exemption as a weapon and
not a benefit?
10.What if the divorced spouses live in different states, or one spouse later moves
to another state with a much higher premium?
STATUTORY STRUCTURE OF THE NEW FEDERAL HEALTHCARE LAW
To understand the answers to the above questions, one must first generally grasp the
statutory structure of the law. There are three basic concepts:
1. Mandate.Generally, the new law requires individuals to carry a certain
prescribed level of health insurance for the individual and the individual’s
dependents unless they are covered under other qualifying health insurance,
such as employer-based health insurance or certain other qualifying
governmental plans. Sieloff and Associates, P.A.
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2. Subsidy. The subsidy for the mandated health insurance is created in new IRC §
36B “REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH
PLAN.” The subsidy for the mandate is created and administered through the
filing of tax returns, is a refundable tax credit referred to as the “premium
assistance credit” and is steeply and inversely graduated based on the
“household income” of the taxpayer starting at 2% of household income up to
133% of poverty line income and rising to 9.5% of household income for
incomes up to 400% of poverty line income (See IRC § 36B(b)(3)(A)).
3. Penalty.To enforce the mandate, IRC § 5000A, subd. (b) provides that if a
taxpayer fails to meet the mandated coverage for the taxpayer or a dependent
of a taxpayer as defined in IRC§152 the taxpayer, or the taxpayer and the
spouse with whom the taxpayer files a joint return, is liable for a penalty for
each month (after three months) in which the coverage is not in effect. Note
that the penalty is tied to the dependency exemption. The penalty must be
“included” with the taxpayer’s return for the taxable year of the period of noncoverage.
An easy way to remember these three key terms is the acronym “MSP,” Mandate-SubsidyPenalty, as in Minneapolis/St. Paul airport.
THE MANDATE
IRC § 5000A requires an individual to “… ensure that the individual, and any dependent of
the individual … is covered under minimal essential coverage …” The language in this
section is odd because the statute does not require an individual to provide coverage but
only to “ensure” the coverage. The words “shall” or “must” are not used. It is peculiar
terminology and one wonders whether in the context of a dissolution of marriage
proceeding, for example, that obtaining a court order ordering a party to provide the
coverage would be sufficient to “ensure” the coverage.
THE SUBSIDY
The federal subsidy for the cost of qualifying health insurance premiums is in the form of
a refundable tax credit to be claimed by the individual taxpayer on the taxpayer’s income
tax returns commencing in 2014. Hence, the subsidy is primarily administered by the IRS.
Under some circumstances the tax credit can be determined and paid in advance,
presumably directly to the insurance company.
To compute the subsidy, initially 2012 income is used for the 2014 subsidy. If income for
2014 is actually higher than 2012, the taxpayer will have to repay the subsidy
(repayment capped at $250.00 for individuals and $400.00 for a family if income is less
than 400% of the poverty line. If actual 2014 income is over that, 100% of the claimed Sieloff and Associates, P.A.
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credit must be paid back without limit). A refund can be claimed if 2014 income is
actually lower than 2012.
Basically, the way the system is intended to operate is that beginning in 2014, each state
must set up an Exchange, which is essentially a market by which private insurance
companies will offer individual coverage of health insurance, which must contain certain
levels of “essential benefits.” There are four benefit levels to be available, referred to as
“bronze,” “silver,” “gold” and “platinum” levels. The benefit level of each of these plans
increases from the lowest “bronze” level to the best or “platinum” level. The insurance
companies will then compete as to price for each of these offerings. The subsidy (tax
credit) is based on the second lowest cost “silver” plan available in the Exchange in the
state where the taxpayer resides. If divorced spouses live in different states, the
comparative cost of qualifying coverage can be dramatic.
To be eligible for the tax credit, the taxpayer’s household income must be no more than
400% of the federal poverty line for the family size involved. Those at or below poverty
level will probably be shifted to the new and expanded medical assistance program.
Those with incomes above the 400% poverty level are not entitled to the credit. Set forth
below is the 2009 U.S. HHS poverty guidelines for the 48 contiguous states:
The 2009 Poverty Guidelines for the 48 Contiguous States and the
District of Columbia
Persons in
family
Poverty
guideline
Persons in
family
Poverty
guideline
1 $10,830 5 25,790
2 14,570 6 29,530
3 18,310 7 33,270
4 22,050 8 37,010
For families with more than 8 persons, add $3,740 for each individual
person.
SOURCE: Federal Register, Vol. 74, No. 14, January 23, 2009, pp. 4199–4201
The higher the taxpayer’s household income and the lower the number of individuals in
the “household,” the lower is the premium assistance credit.
To be eligible for the credit, taxpayers who are married at the end of the year must file a
joint income tax return. No credit is allowed to any individual for whom a dependency
exemption deduction is “allowable” to another taxpayer (apparently, without regard to
whether the other taxpayer actually claims the dependency exemption). Compare the
dependency exemption language to depreciation recapture for depreciation “allowed or
allowable”. Note that in other provisions of the law, determinations are not based on Sieloff and Associates, P.A.
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whether the dependency exemption is allowable, but based on whether it is allowed, i.e.
actually claimed. Perhaps the IRS will force a taxpayer to claim it.
The family size in calculating “household income” is determined by the number of
individuals for whom the taxpayer is actually “allowed” personal exemptions. For
example, in a family of four with two spouses and two minor children, all of whom are
claimed exemptions on a joint return, the family size would be four.
“Household income” is the taxpayer’s adjusted gross income increased by tax exempt
interest and the foreign earned income and foreign housing expenses excluded from
gross income for taxpayers residing outside the United states or actually working outside
the United States for extended and specific number of days. This is referred to as
modified adjusted gross income. The refundable tax credit diminishes as the taxpayer’s
household income increases because the tax credit is based on a percentage of the
taxpayer’s income, which increases from 2% to 9.5%.
Essentially, the subsidy is the amount by which a qualifying premium payment exceeds
the product obtained by multiplying the applicable percentage by the household income.
Reprinted below is a table set forth in IRC § 36B(a)(3)(A).
(A) APPLICABLE PERCENTAGE.
(i) In general – Except as provided in clause (ii), the applicable percentage for any
taxable year shall be the percentage such that the applicable percentage for any taxpayer
whose household income is within an income tier specified in the following table shall
increase, on a sliding scale in a linear manner, [emphasis mine] from the initial premium
percentage to the final premium percentage specified in such table for such income tier:
In the case of household income
[Emphasis mine] (expressed as a
percent of poverty line) within the
following income tier:
The initial
premium
percentage is –
The final
premium
percentage is –
Up to 133% 2.0% 2.0%
133% up to 150% 3.0% 4.0%
150% up to 200% 4.0% 6.3%
200% up to 250% 6.3% 8.05%
250% up to 300% 8.05% 9.5%
300% up to 400% 9.5% 9.5%Sieloff and Associates, P.A.
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These amounts are to be indexed in future years as well as indexed for the rate of
premium growth. Further, all of the computations to be made in determining the tax
credit will be done on a monthly basis, but for simplification in this presentation annual
amounts are used. Also, the break points in the percentages will be smoothed by the
“linear” “sliding scale” by regulations.
If the “second lowest cost silver plan” premium is used, there is disregarded premiums
for benefits offered by an insurer in addition to the required essential health benefits and
there is also disregarded any premiums for state mandated benefits in addition to the
essential health benefits. Some pediatric dental coverage is included.
In all cases, the computations must be made for both the taxpayer’s own coverage (“selfonly coverage”) and family coverage. “Household income” is defined as “modified
adjusted gross income” of the taxpayer and all individuals for whom a dependency
exemption deduction was “allowed” and who were required to file a tax return for that
year. Hence, even though a claim for a dependency exemption may have been allowable,
if it was not claimed and allowed, the dependent’s income would not be included and if a
dependent (or for that matter, the taxpayer) was not required to file a tax return because
the person’s income did not meet the filing threshold (in 2010, $9,350.00 for a single
person or married person filing separately, or $18,700.00 for married person filing
jointly), the income of those individuals is not included. (There is discussion that by 2014
almost every adult must file some income report with the IRS if no tax return is required
or filed).
There is no distinction between the income of a spouse or a dependent and so,
presumably, if the exemptions are not claimed the income of the spouse or dependent
would not be included. Finally, the credit cannot exceed the lesser of the actual premium
for the qualified health plan paid by the taxpayer or the monthly premium that would
have been paid for the second lowest cost“silver” plan.
The best way to show how the premium credit works is by the following Example.
Assume that the second lowest cost silver plan for family coverage is $12,000.00 per year
for a family of four and the taxpayer actually purchased that insurance:
1. Assume that the taxpayer is married and has filed a joint return with the spouse as
required.
2. Assume that the taxpayers actually claimed as dependency exemptions their
two minor children.
3. Assume that the children did not have any income (and that there was no
“kiddie tax” imputed income to the parents) and therefore were not required to
file tax returns themselves.
4. Assume that the taxpayer’s and spouse’s combined household income was
$80,000.00. This would put them in the range for claiming the tax credit. If their Sieloff and Associates, P.A.
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household income was below $22,050.00, they would likely be on Medical
Assistance, would not be purchasing the insurance on the Exchange and
therefore would not be entitled to a credit. If their combined household income
was over $88,200.00 (4 x the 22,050 poverty line for a family of four), the
taxpayers would not be entitled to the healthcare tax credit because their
household income would be over 400% of the poverty line.
5. The healthcare credit is computed by first multiplying the taxpayers’ household
income of $80,000.00 by 9.5% (The percentage used when the taxpayers’
household income lies between 300% and 400% of the poverty line.). The
product of this multiplication is $7,600.00. The refundable healthcare credit
then would be $12,000.00 minus $7,600.00 or $4,400.00.
DIVORCED PARENTS AND PATERNITY CASES
Let us examine the after tax credit cost of an Exchange purchased health insurance policy
for divorced or unmarried parents. First, the following observations should be made:
1. Household income does not include child support.
2. Household income includes spousal maintenance to the recipient because
spousal maintenance is included in gross income, but is excluded from the
household income of the payor because spousal maintenance is deducted from
gross income in computing adjusted gross income.
3. In computing household income for purposes of the applicable percentage of
the poverty line, the family size to be used depends on which of the parents is
“allowed” to deduct the dependency exemption for the children. Therefore, if
the non-custodial parent is granted the right to claim a child as an exemption
(for example, the custodial parent executes IRS Form 8332 granting to the noncustodial parent the right to claim the exemption), the poverty line percentage
for the custodial parent (assuming the custodial parent is not remarried and
has no other children) would then be determined based on a household of one
whereas the non-custodial parent’s percentage would be based on a household
of two.
4. If the household income of one parent is below the poverty line and that parent
is mandated to “ensure” that the child has the insurance, that parent would
likely pay nothing for health insurance. Using the facts in the Example above,
except that the parties are divorced and the non-custodial parent claims the
two children as exemptions, if the non-custodial parent had a household
income of over $73,240.00 (four times the $18,310.00 poverty line for a family
of three), that parent would have no subsidy for an annual $12,000.00 health
insurance premium covering the parent and the two children. IRS § 5000A
imposes the penalty for failure to have the minimum insurance on the taxpayer
on whom the child “is a dependent (as defined in § 152).” Note that the child
under 18 penalty is only one-half of the adult penalty. Sieloff and Associates, P.A.
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5. If the higher income parent claims the dependency exemption for a child, then
that parent must pay the penalty. If the lower income parent claims the
dependency exemption, then the lower income parent must pay the penalty.
6. If the parents live in different states, the subsidy is based on the premium in
that state.
7. If there is more than one child, and the parents either split the right to claim the
children as exemptions between them or if the right to claim a dependency
exemption is alternated between parents, then the mandate, subsidy and
penalty must be done for both parents. This could lead to great confusion and
even chaos.
THE PENALTY
By the year 2016 individuals who fail to maintain the minimum essential coverage are
subject to a penalty under IRC § 5000A equal to the greater of(1) 2.5% of household
income in excess of the minimum income required to file a tax return (In 2010 the
income tax return filing threshold is $9,350 for a single person and married persons filing
separately and $18,700 for married persons filing jointly and persons filing head of
household) or (2) $695 per uninsured adult in the household and one-half of that amount
for each household member under age 18. The total household penalty may not exceed
$2,085. Further, the total annual household penalty may not exceed the national average
premium for a “bronze level” health plan (not to be confused with the second lowest cost
“silver level” health plan, which is used to compute the healthcare tax credit subsidy
under IRC § 36B(b)(2)(B)(i)).
The per adult penalty is phased in: $95 for 2014; $325 for 2015; $695 for 2016;
thereafter the penalty is indexed to the CPI. The percentage of income penalty is also
phased in: 1% for 2014; 2% for 2015; 2.5% beginning in 2016. Married persons filing
joint returns are jointly liable for the penalty. The penalty is calculated on a monthly basis
and essentially does not begin to run until there is a lapse of insurance for three months.
The penalty is assessed through the Internal Revenue Code and is treated as an additional
amount of tax owed. The penalty must be paid upon notice and demand by the IRS and is
assessed and collected in the same manner as most other assessable penalties. Although
the IRS is not authorized to file tax liens or seize property for collection of the tax, nor is
noncompliance with the individual responsibility to carry health insurance subject to
criminal or civil penalties and interest does not accrue on the failure to pay the
assessment, the tax must be reported on the individual income tax return and certainly, if
there is any estimated or withheld taxes paid, it will be used to pay the penalty. See Joint
Committee on Taxation, Act §1501 (JCT Rep. NO JCX – 18 – 10). My guess is that the
penalty could be discharged in bankruptcy if a bankruptcy petition is filed three years
after the date of assessment like other income tax liabilities except as affected by a
dissolution decree or other court order. Sieloff and Associates, P.A.
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Household income is defined as adjusted gross income (AGI) of the taxpayer plus the AGI
of all individuals in the household who are required to file a tax return for that year.
Household income is increased by tax-exempt interest and the foreign earned income
exclusion.
If family coverage is not affordable (i.e. (a) the required employee contribution to an
employer health plan or (b) the net cost of the actual premium after the federal subsidy
through the refundable tax credit for an Exchange based plan for the lowest cost“bronze
level” health plan exceeds 8% of the taxpayer’s household income (increased by any
salary reduction arrangement, such as a cafeteria plan)), the taxpayer is exempt from the
penalty.
Also, if an employee (depending on his exact income) with a family is offered self-only
coverage from the employer costing 5% of income and family coverage costing 10% of
income, the employee may not be eligible for the tax credit for self-only coverage because
it costs less than 9.5% of household income. However, the employee is not exempt from
the penalty for failure to purchase self-only insurance because the self-only insurance
costs less than 8% of income.
The minimum coverage required by the law is met (and no penalty is imposed) by
coverage through eligible employer sponsored plans, grandfathered group health plans,
Medicare, Medicaid, CHIPS insurance, U.S. Military and veteran’s health insurance. These
plans are listed in IRC § 5000A(f). Limited scope plans such as dental and vision benefits,
coverage for specific medical conditions, per diem hospital indemnities and Medicare
supplemental health insurance do not qualify.
If an individual is a dependent of another taxpayer, the other taxpayer is liable for any
penalty payment with respect to the individual. Therefore, a minor child claimed as a
dependency exemption on a parent’s return is not subject to the penalty but the parent is.
One possible circumstance is, for example, when the child graduates from college, has
attended college for five months of the year of graduation and the child leaves college, but
then no longer has health insurance; if the parent claims the child as a dependency
exemption for that year, then the parent will be liable for the penalty for the adult child.
The penalty does not apply to individuals whose household income is below the income
threshold for filing income tax returns. It does not apply to an individual who is a
member of an Indian tribe. It does not apply for periods of less than three months. There
is a hardship exception. Illegal aliens are generally excluded from the law.
Every person (i.e. insurance company) who provides insurance coverage for an individual
must report the coverage to the IRS. The IRS is required to send notification to each
individual who files an individual income tax return and who is not enrolled in the
minimum coverage. Sieloff and Associates, P.A.
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An individual’s family size is equal to the number of personal exemptions the taxpayer is
allowed for the tax year including dependency exemptions. Adjusted gross income also
includes the imputed income from the so called “kiddie tax” whose unearned income
must be reported on the parent’s tax return. Household income is that which the IRS
determines in the most recent year for which the information is available, (which is
oftentimes two years old). For the years 2014, 2012 income is tentatively used. See
discussion above.
If an individual is eligible for employer coverage because of a relationship to an employee
of that employer, affordability is determined by reference to the required contribution by
the employee and not the individual for whom the coverage is to be obtained. For
example, if a child is eligible for coverage through a non-custodial parent’s employer,
affordability is determined by reference to the non-custodial parent, even though the
custodial parent might claim the dependency exemption and therefore is liable for the
penalty with respect to the child if the non-custodial parent doesn’t enroll the child in the
plan. IRC § 5000A(e)(i)(C).
When and if the federal health legislation becomes effective in 2014, Minn. Stat.
§518A.41, subd. 4 relating to Court orders for health insurance for children should be
amended to reflect what I call a “marshalling of assets” approach to health insurance for
minor children because of the vast disparities of cost of health insurance depending on
the parents’ respective incomes. For example, it is senseless to order a parent whose
income is over four times the poverty rate to carry health insurance and pay $12,000.00
per year in premiums when the other parent’s income is below the poverty rate and
would get the insurance for free. It equally makes no sense to order the parent with a
higher income to provide the insurance and forwhom a smaller tax credit would be
available rather than the lower income parent who would be eligible for a larger tax
credit. The Court could make compensatory adjustments elsewhere in the decree or
order.
Obligations, Indemnity and Hold Harmless Agreements in Legal Separation and
Dissolution of Marriage Decrees. See Fast v. Fast 766 N.W.2d 47 (Minn App 2009)
Holding:
“The current version of section 523 (a)(15) of the bankruptcy code specifies
that obligations to a spouse resulting from separation agreements and
dissolution judgments are not dischargeable. Spouses are no longer required to
participate in the bankruptcy proceedings to preserve their rights to enforce
such marital obligations.”
Therefore a dissolution of marriage decree that ordered a husband to pay a debt stating
that the husband “…shall also assume full responsibility for all business debt holding
[wife] harmless therefrom” was not discharged in bankruptcy as to the wife. Sieloff and Associates, P.A.
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This case applies to not only health insurance obligations but all other obligations
imposed by a judgment and decree. Proceed with extreme caution on including health
insurance obligations, including indemnifications and hold harmless obligations in a
judgment and decree or MTA.
Recommendations to implement now
1. Because of the uncertainty in how the new law will work, if your client claims a
child as a tax exemption or is obligated to carry health insurance for a child, you
should do one or more of the following:
a. Not impose as a mandate that your client provide the insurance. Leave
wiggle room.
b. Reserve the right to your client to change the order without a showing of
a substantial change in circumstances to reallocate the exemption and
the health care obligation to obtain health insurance at the lowest cost
after considering the Federal subsidy and the expanded medical
assistance. Law changes are usually not considered as a valid basis for a
substantial change in circumstances motion.
c. Avoid any indemnification, hold harmless or contingent obligations (such
as if one party loses group health insurance, that party or the other party
must provide individual health insurance.
2. A divorce decree or child support order should provide that if one parent is
subject to the penalty for failure to ensure that a child has health insurance
because the other parent was obligated to, but did not provide it, the decree or
order should provide for indemnification of the penalized parent of the penalty
amount.
3. Consider that when the decree or order divides dependency exemptions
between parents (when there are two or more children) or alternates every
other year the right of the parents to claim a dependency exemption, one may
be creating unintended consequences and even chaos. The insurance policy
should not change every year. The benefit to a party of claiming the dependency
exemption and the $1,000.00 child credit that goes with it may be less than the
cost of the mandate or penalty, imposed on the party who claims the
dependency exemption.
4. A reservation clause should be included in the decree or order, which would
provide that the relative obligations of the parties commencing in 2014 to pay
for health insurance coverage must be based on a “marshalling of assets”
concept whereby the dependency exemption, mandate, penalty and subsidy
through the tax credit must be allocated in such a way as to reduce the total
amount of the out-of-pocket health insurance costs to both parties and to take
full advantage of the federal subsidy for the health insurance. Sieloff and Associates, P.A.
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5. Reservation of health insurance obligations should be triggered if a parent
moves to a different state.
6. A judgment and decree or other order converts what might be an otherwise
dischargeable obligation into a non-dischargeable obligation. The drafter
should provide escape clauses or contingencies to avoid this.
CONCLUSION
Health insurance orders in dissolution and paternity cases should focus on:
1. The specific needs of children.
2. Allocation of responsibility for premium payment between the parties.
3. Assignment of authority to one or both parents to choose and monitor
coverage.
4. “Marshalling Assets” of the parties to fully utilize federal benefits.
The new health care law does none of this because its basic architecture is the Internal
Revenue Code, based on “the allowed” or “allowable” dependency exemptions.
Practitioners should attempt to achieve reasonable decrees and orders under state law
even through our hands may be tied by federal preemption.
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required to inform you that, unless expressly indicated, any tax advice contained herein is
not intended to be used and may not be used to (a) avoid penalties imposed under the
Internal Revenue Code (or applicable state or local tax law provisions) or (b) promote,
market, or recommend to another party tax-related matters addressed herein.
GENERAL DISCLOSURES:Any information herein should be taken as general advice and
should not be relied upon as legal advice. The information provided is not intended to nor
does it create an attorney/client relationship. The presentation is for general information
purposes only and is not legal advice. You should not rely on any information or views
contained in the presentation in evaluating any specific legal issues you may have. Please
consult an attorney for specific legal advice.