Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) introduced the Dependent Income Exclusion Act to make health insurance more affordable for families with children who have part-time jobs or are enrolled in job training programs. Specifically, this legislation would allow families to exclude specific dependent income when calculating their eligibility for Affordable Care Act (ACA) subsidies. Senators Jacky Rosen (D-Nev.) and Sherrod Brown (D-Ohio) are cosponsors of this legislation, and Congressman Steven Horsford (D-NV-04) introduced the companion legislation in the U.S. House of Representatives.
“Parents of students shouldn’t be financially punished when their child takes on a summer job or campus work-study program; disqualifying an entire family from premium tax credits sends the wrong message to kids who are working to pay for college,” said Senator Cortez Masto. “My legislation will ensure middle class families continue to qualify for the credits that keep their health insurance affordable. There’s more we must do to improve health care affordability for consumers, but this is an important first step. I’m proud to fight to ensure parents across the Silver State have access to affordable, quality health care for themselves and their kids.”
“Rather than supporting efforts to take health care away from hardworking Ohio families, Congress should be focused on ways to make health care more affordable,” said Senator Brown. “That’s exactly what this bill would do – improve the Affordable Care Act and help more middle class families in Ohio qualify for premium tax credits and make comprehensive coverage affordable.”
“I’m proud to work with members of Nevada’s delegation to support this commonsense legislation to make health insurance more affordable for hardworking families,” said Senator Rosen. “The Dependent Income Exclusion Act would protect working and middle class families from being penalized when their kids take on part-time jobs. We should be encouraging work experience and making health coverage more affordable—this bill does both.”
“We cannot simultaneously encourage a strong work ethic in our young people AND penalize their families by disqualifying them from helpful tax credits and access to affordable health insurance,” Congressman Horsford said. “Families with students in college or with young adults working to contribute funds to cover their expenses should not be barred from accessing tax credits that keep their health care affordable. Expanding access to quality health care for my constituents, and for Americans across the country, is my top legislative priority and this bill is an important step toward a future where no one is denied the care they need.”
BACKGROUND:
Tax credits available under the ACA to subsidize health insurance premium costs are generally available for individuals with household incomes between 100 and 400 percent of the Federal poverty level (FPL). This leaves some middle-income consumers to pay their entire premium, and in some cases forces families to forgo coverage and remain uninsured.
The Dependent Income Exclusion Act would allow consumers to exclude the income of their dependents when calculating their eligibility for premium tax credits, so long as the dependent is enrolled at least part time in school or an apprenticeship, or participating in a job training program. For a family with kids in college who are working in the summer to put money towards tuition; or for a family with kids attending community college while working part-time, this would make insurance more affordable by increasing the generosity of credits they already get, or make them newly eligible for credits.
Specifically, the Dependent Income Exclusion Act will exclude earned dependent income in calculating an individual’s modified adjusted gross income (MAGI) for the purposes of eligibility for premium tax credits used to purchase insurance on the ACA exchanges. To qualify for the exclusion:
- The dependent must be under 18 or
- The dependent must be under the age of 24 and
- A part time enrollee in
- School or
- An apprenticeship or
- A part time enrollee in
- A participant in a job training program
- The income must be employment income.
This legislation is supported by the American Cancer Society, the American Heart Association, Families USA and Protect our Care.
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