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Who pays the penalty in 2014, me or my parents? Consumer Q&A

By on February 22nd, 2013
Filed: Advice, Health Insurance, Health Reform, You, Young Adults

Question mark made of Scrabble piecesOh boy, here they come. You can hear them like a tornado of mosquitoes approaching at 60 MPH. I’m talking about consumer questions about health reform, of course.

There are basic questions like “will I have to buy health insurance?” or “will I qualify for a subsidy?” Those are pretty straight-forward. Then there are the tougher questions. Last week on Yahoo Answers we took a pretty good one.

The asker in this case was 20 years old, uninsured, living with her parents. Her parents’ won’t add her to their plan since it would cost them $300 each month.

So she wants to know: Since my parents claim me as a dependent on their tax return, who will pay the penalty if I’m still uninsured in 2014?

The eHealthInsurance reply was selected as Best Answer:

Good question. If you’re claimed as a dependent on your parents’ federal tax return and you don’t have insurance, they may be responsible for the fine. The fine in the first year, however, is pretty minimal, less than $100. You’d need to consult with an accountant to get a really solid answer on this, however.

$300 per month is a lot to keep you insured under your parents’ plan, but keep in mind that claiming you as a dependent provides them with a dependent exemption on their federal taxes that is worth about $3,600 per year.

That said, you could look into purchasing a health insurance plan on your own. If you’re young and healthy, it doesn’t have to cost so much. Depending on where you live, and a few other factors, you may be able to pay significantly less than $300 per month, though the coverage may not be as robust as what’s available under your parents’ plan.

If you want to look into buying coverage on your own, work with a licensed agent. It doesn’t cost anything extra and can give you a better idea of what’s available in your area. You may also want to check out the health insurance buyer’s guide we published for students and young adults. You can read it for free online here.

Hope that helps

Image by Flickr user DorkyMum


About Douglas Dalrymple

Doug Dalrymple is a member of the communications team at eHealth, Inc. and has worked in the health insurance and technology industries for fifteen years. He works on communications strategy, content creation and management, project management, and corporate messaging.

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