A divorce involving children may have to address both child custody and child support issues. Yet with the new health insurance rules, additional complications may arise.
Specifically, a non-custodial parent may have a child support obligation that includes paying for health care premiums. The divorce decree may indicate that such support will end when the child turns a certain age, such as 21. However, the Affordable Care Act allows children to remain on their parents’ plan until they reach 26 years of age. In fact, many health plans might be required by state law to offer dependent coverage until age 26. This requirement is true in Massachusetts, according to the website of the state’s Executive Office for Administration and Finance.
Given the health care reform, the question is raised of whether existing divorce decrees must be modified to address a potential discrepancy in coverage. Our family law firm has experience helping clients understand their support obligations under the best interest of the child standard. In addition, we would observe a distinction between the provisions of a divorce agreement and the law’s requirements: The reforms require plans to offer coverage to adult children until age 26, but do not specifically state that parents must pay for that coverage after a child has turned 21.
In an interesting catch-22, the health care reforms include a penalty for people that don’t have insurance. For 2015, that fine is $325 per person or 2 percent of household income, whichever amount is greater. In the example above, a parent might satisfy his or her child support obligations pursuant to a divorce decree, and thus not be required by that agreement to fund health coverage for a child that has turned 21. However, to the extent the parent still claims the child as a dependent on his or her tax return, the parent could remain liable for any penalties incurred by the child for not having insurance after the age of 21.
Source: NPR, “Untangling The Many Deductibles Of Health Insurance,” Michelle Andrews, Aug. 5, 2015