The Potential Impact of the Affordable Healthcare Act on Divorce in Mississippi

Every major website, newspaper, radio, and social media network is teeming with news on the recently enacted Affordable Healthcare Act.  The Healthcare Act has undoubtedly produced a strong reaction from the American public and everyone seems to have an opinion on the potential effects of the Act.  One theory posed in recent days is that the Affordable Healthcare Act, commonly called Obamacare, will increase the divorce rate across the country including here in Mississippi.

A Brooklyn couple provided their story as an explanation for why Obamacare may impact the divorce rate.  The couple, Nona Aronowitz and Aaron Cassara, earn over $62,000 a year combined, making them ineligible for subsidies under the Affordable Healthcare Act.  Nona Aronowitz is a freelance writer and Aaron Cassara a film industry worker.  If the couple instead chose to divorce and live together, they would qualify for subsidies.  The savings would equate to several hundred dollars a month.  Nona and Aaron are now considering divorcing because they realize the potential large savings.

Nona and Aaron are not alone in discussing divorce in the post-Affordable Healthcare Act world.  The Act has been criticized for instituting a divorce incentive or wedding tax due to its sometimes negative impact on married couples’ finances.  The calculator featured on the Kaiser Family Foundation website illustrates the affect of marriage on healthcare prices.  For instance, a forty year old couple with two children earns $93,000 combined, with one parent earning $70,000 and the other $23,000.  They will not receive a subsidy if they apply while married and will pay a premium of $11,547 annually.  If that same couple divorced and gave custody of the children to the low wager earning spouse, their combined annual premium would only be $4,317.

Anyone in Mississippi considering divorcing to save money on health insurance costs should exercise caution, however, as it is actually illegal to cohabitate in our state.  In Mississippi, as well as Florida and Michigan, it is illegal for opposite-sex couples to cohabitate.  The law in Mississippi is set out in Miss. Code 97-29-1.  This law is rarely, if ever, enforced but does have tax consequences.  The IRS will not allow opposite-sex couples in Mississippi, or Florida and Michigan, to file jointly or declare their significant other as a dependent.  Those caught filing as such or filing to healthcare subsidiaries using their de-facto marriage status could have to pay back the years of undeserved tax credits if caught by the IRS.

While the potential impact of the Affordable Care Act on divorce is a new issue, the topic of health insurance following a divorce has existed for as long as the institution of divorce.  Most often, divorce results in the loss of health insurance by one of the spouses, generally in families where one spouse was a stay at home parent or lesser wage earner.  A study conducted by the University of Michigan in 2012 revealed that about 115,000 women loss their health insurance every year after divorce.  In these situations, the Affordable Care Act may prove a boon for divorced spouses as it should allow them to get quality coverage at an affordable rate.

Though divorcing to obtain less expensive health insurance seems like a rather extreme measure, time will tell whether couples actually resort to this means of saving money.  In the meantime, if you are considering divorce and have questions about the impact it will have on your health insurance, Matthew S. Poole can help.  Matthew is abreast with the most current health insurance laws and can examine your individual situation to determine how you can best protect your essential health insurance coverage after divorce.

Call The Law Office of Matthew S. Poole today at (601) 573-7429 to schedule a consultation.

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