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Wednesday, April 9, 2014

IRS Announces Tax Change to Help Survivors of Domestic Violence Get Health Insurance

Elaine Saly

Health Policy Analyst

Every year at tax time, more than 2 million married taxpayers file returns separately from their spouse. Usually, consumers who are legally married are required to file a joint tax return with their spouse in order to receive financial assistance to lower the cost of buying health insurance through the marketplace. However, for some taxpayers, such as survivors of domestic violence, filing taxes jointly with a spouse may not be an option, as getting in contact with a spouse may be traumatic, dangerous, or prohibited by a restraining order. 

The IRS recently announced a change to the rules for getting premium tax credits to allow married survivors of domestic violence who file taxes separately from their spouse to qualify for financial assistance. 

This important change will enable more people to get help paying for health insurance. 

How survivors of domestic violence can qualify for financial assistance

To get financial assistance through the marketplace, consumers must file taxes, and if they are married, they must file taxes jointly with their spouse—unless they can file taxes as head of household because they live separately from their spouse and provide primary support to dependents. 

If consumers are unsure of their filing status, they can use the IRS’ “What’s My Filing Status?” tool to find out. 

The new IRS rule allows survivors of domestic abuse who file taxes separately from their spouse to get financial assistance if they: 

  1. are living apart from their spouse when they file taxes, 
  2. are unable to file a joint return because of domestic abuse, and
  3. attest to these circumstances on their tax return.  

Survivors of domestic violence who qualify can still enroll in health insurance

The Centers for Medicare and Medicaid Services (CMS) has announced that state and federal marketplaces must allow more time for consumers who are survivors of domestic violence to enroll in health insurance. 

Survivors of domestic violence are eligible for a special enrollment period to enroll in a health plan before June 1. The federal marketplace has provided guidance to enrollment assisters explaining the process to gain this special enrollment period by contacting the marketplace call center. When completing a new application, survivors of domestic violence should indicate that they are not married in order to qualify for financial assistance. Consumers in states that are running their own marketplace should contact their marketplace to find out how to enroll. These consumers will not face a penalty for being uninsured during April and May.  

Affordable Care Act’s pre-existing conditions provision will help survivors of domestic violence

The Affordable Care Act has made a significant difference in ensuring access to health care for everyone—including victims of domestic violence—by banning discrimination based on health status. Domestic violence was previously considered a pre-existing condition that could provide grounds for health insurance companies to raise rates or deny coverage. 

The new IRS rule is one more important step to ensuring that victims of domestic abuse do not face barriers to getting health care.