Dependent (Spouses or children)
What Is a Dependent?
When talking about health insurance, a dependent is a person who relies upon another individual for care and financial support. Prior to the passage of the Affordable Care Act, dependents were normally spouses and children who were minors, meaning children under the age of 18 years old. However, when the Affordable Care Act took effect, children can stay on the health insurance plans of their parents until the age of 26. The law allows for children who are adopted, stepchildren, and foster children to be classified as dependents.
Who Qualifies as a Dependent?
In the majority of cases, dependents are spouses, children or children up to the age of 26 years old. However, there are some circumstances where an older adult child or a person who is not the policy holder's child, may be considered a dependent, and a child or relative may qualify.
To be a qualifying relative, a person must meet a number of criteria:
- The qualifying dependent in question must have a specific relationship with the policy holder.
- The qualifying dependent may not make more than the exemption amount. The exemption amount as of 2016 was $4,050.
- The qualifying dependent must not provide more than half of their own support for the taxable year.
- The qualifying dependent must not be listed as a qualifying dependent for anyone else.
It's important to note that some employer health plans may have more lenient standards for adding a person on as a dependent. Children may be eligible for coverage past the age of 27, and relatives may be able to provide more of their own support and still be eligible for tax-favored health insurance coverage.
Benefits of Claiming a Dependent
Money Saved Claiming a Dependent
Claiming dependents can increase the value of your tax credit under the Affordable Care Act, thereby lowering your total burden even if the premium, your monthly payment for health insurance, increases.
For example, if you earn $23,000 with no dependents, you would pay a maximum of 6.34% for health insurance under the Affordable Care Act. However, if you have two dependents and make the same amount of money, you would pay no more than 2.01% of your income.
Medical Benefits for Claiming a Dependent
By claiming dependents on your insurance policy, you can ensure that your entire family has access to the same doctors and medical care. All payments go toward the same deductible in a typical plan, so if large medical expenses should arise for multiple family members, you won't have to worry about paying off multiple deductibles. There are exceptions to this rule, but this is commonly the case.
Adding Dependents to Your Health Plan
If you're interested in adding a dependent to your health insurance policy, you'll normally have to do so during an enrollment period if you go through your employer for healthcare.
If you have your own insurance policy, you will have to follow the rules of your provider. Some providers will allow you to add individuals to your plan at any time, but others may have restrictions in place for when this can be done. Talk to one of our experienced agents about adding a dependent to your health insurance policy 858-771-4087, or enter your zip code here for free health insurance quotes that include your dependents!