(Newswire.net — October 17, 2013) Portland, OR — Reporting by PJ Media has revealed that married couples can save thousands of dollars on healthcare premiums if they get a divorce and continue to live together.
That’s because the Affordable Care Act (AKA Obamacare) has been designed to provide healthcare benefits that are substantially more generous for lower-income people, and the bill counts a married couple’s income jointly.
An example from the Kaiser Family Foundation, shows that a 60-year-old married couple with no children in the household, with identical annual incomes totaling $62,041. Obamacare premiums rise sharply when combined earnings hit $62,041.
If they stay married, their net premium next year would be $16,382. But the max for unmarried individuals is $45,960 before losing Obamacare’s subsidies, so if the couple divorces and each reports an income of $31,020.50, their combined net premium would be $5,354. That saves $11,028 next year.
Another example has a 40-year-old couple with two children and incomes of $70,000 and $23,000.
Their combined income is $93,000, and subsidies disappear at $92,401 for married pairs with two children. Their combined premium would be $11,547 next year.
But if they divorce and give custody of the children to the lower-earning spouse, one spouse’s premium would be $3,857 and the other’s would be $460, for a total of $4,317. That’s a savings of $7,230 next year.
PJ Media’s Tom Blumer observes: “Clearly, many couples who are considering marriage, especially after several years of seeing formerly married couples regress to cohabiting, will look at Obamacare’s ‘wedding tax’ and say, ‘never mind.’
“The effect on society will be incalculable, and certainly not for the good.”
However, the law in many states says a couple cannot cohabit indefinitely and still claim not to be married.
The IRS could find those couples who are claiming they are not wed for healthcare subsidy purposes, leading to this scenario, according to Blumer: “Those caught and punished by the IRS carrying out its new role as the de facto ‘marriage police’ could get hit with multi-year bills for undeserved ‘tax credits’ running into tens of thousands of dollars.”
Source: http://pjmedia.com/blog/the-wedding-tax/