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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Separate Returns = No Subsidy?

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Question: What if a married couple is filing separately? Based on our individual incomes, my husband would qualify for Medi-Cal and I should be eligible for a subsidy. But the exchange told me that in order to receive premium assistance spouses are required to file a joint income tax return. Is that true?

Answer: Yes. The law says if you file as married filing separately, you will not be eligible for any premium subsidy at all, regardless of income. Only domestic abuse, abandonment, or other special circumstances (pending divorce?) may be exempted from the requirement to file a joint return in order to qualify for the premium subsidy. Reference TD 9590, IRS


Regardless of the nature of your partnership, the fact that you are husband and wife negates everything. You cannot be a business group of two and qualify for small group plans/rates. You cannot file separate returns and receive premium tax credits to help cover the cost of insurance. You are not foreclosed from applying for health insurance through Covered California, only your eligibiity for premium tax credits is affected. Give your thanks for this to the Democrats and Obama who passed the PPACA in 2009-2010.

What is the husband and wife are partners in small construction company? They complete a 1065 partnership return………then they split the profit or loss on their own 1040. Are they now disqualified for Covered California program?

Dee: Medi-Cal eligibility is based chiefly on the income of the applicant. Medi-Cal does not consider the applicant’s tax-filing status for eligibility.

Is there a distinction between ACA/Covered California rules versus Medi-Cal rules with respect to a joint filing requirement for married couples? While CoveredCal wants MFJ status for premium assistance (like the federal tax rules), the basic Medi-Cal eligibility only repeats “How many people in your household?”; ‘this would be the same as your filing status’. Suppose a married individual, not living at the present time with their spouse (because the spouse, being a foreigner who stays with his/her aging mother abroad for some months, while the married individual partner -an American- moves/returns to CA), has a low individual income. Is the individual then possibly eligible for Medi-Cal?

Say, because of the tax laws in the foreign country (where they had been living for awhile) taxes people individually; the American would likely have been filing MFSeparate for as long as they had both been living abroad and plans to continue doing so when he/she returns to California. Eligible for Medi-Cal, if his/her income is low? (or must file MF Joint - with spouse in the old country earning most of the couple’s money?)

The only way a person over 65 can apply for Medi-Cal is if confined to a nursing facility and/or on the basis of joint household income. You cannot separate your income from that of your spouse. If in a nursing facility, you are subject to the Spend-Down test of assets and income. Not a pleasant thought.

If you are over 65, with only a few exceptions, you should be eligible for Medicare. If you or your spouse are “fully insured” for Social Security, you are probably eligible for premium free Part A, and can pay the premium for Part B, which is currently $134/month. That will entitle you to enroll in a Medicare Advantage MAPD plan, and depending on where you live, there might not be any additional premium and you’ll have BETTER coverage than any Platinum HMO plan.

Can a married person over 65, apply for medi-Cal inidividually and not as a couple?

Thanks Steve Shore for providing these valuable links for those interested IN:


Here’s the links I have for IHSS








I am disabled and wanting to receive ihss benefits, but I have to qualify for medical-Cal to even begin the ihss process. My problem there is im married and the requirements to be eligible for medi-Cal is we basically have to make nothing, have nothing, and be going nowhere! My husband isn’t a millionaire by any means, far from it but he makes more than 2k a month which is the requirement to receive Medi-Cal. So that means even though I should receive ihss benefits no problem, I cannot because of this whole medi-cal crap! I’m wondering is there anyway I can get ihss without being on Medi-Cal? And if so, how?!? I’m desperate for some help with my everyday life now that my husband travels for work and is no longer home every night to help me with my everyday needs.

There are all sorts of “penalties” invoked by filing separate tax returns, and the inability to obtain premium tax credits is just one of them. While there may be legal or other reasons for married persons to file income taxes separately, a professional tax adviser may be of value in determining if your situation falls under one of the exceptions.

I think this is a terrible law. Where are the tax benefits for creating less problems in the world? I have outrageous student loans and due to the fact that I incurred this debt to hopefully earn a better income (and prior to being married and not putting this burden on my husband)…I feel I am not penalized for filing separately! Where are the benefits in becoming educated in America?

Thank you so much for using the actual citation on the IRS website

My husband and I filed for divorce and have lived apart for two years. We haven’t finalized the divorce but were wanting to file our taxes separately. Can we do so and when I apply for coverage on Covered California, can I used only my income even though we’re still married? Also, can I include my daughters on the application?

The IRS just this week posted a new rule that spouses living apart as the result of domestic violence can file separately and claim the tax credits, too. Too little, too late.

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Here’s why the information from Covered CA, if repeated accurately above, is not necessarily reliable.

“1. Legally Separated”

Divorced and legally separated are two very different things. Legally separated means a divorce action is pending before the court (a complaint has been filed for adjudication). Divorced means a final decree has been issued. Under federal law, premium tax credits are NOT available to “legally separated” persons unless they have lived apart for at least 12 consecutive months.

“2. Married but living apart” is used only as the criteria to qualify as head of household when a dependent child may be claimed for tax filing purposes. If the taxpayer meets ALL of the listed criteria under this test, then premium tax credits may be available, based on MAGI.

The state has no authority to waive federal rules (IRS/IRC) governing eligibility for premium tax credits. Unless a person meets the federal requirements, nothing anyone from Covered CA says to the contrary means more than the air that was consumed to breathe those words.

I have a client that is married but files separately from her husband. Here is the response I got from a higher-up at Covered California.

The general rule is that married couples must file jointly to be eligible for tax credits. However there are two situations where an individual may not be considered married under the Affordable Care Act, see below:

  1. Legally Separated: individuals who are legally separated under decree of divorce or of separate maintenance are not considered married and can individually be eligible for tax credits, depending on their separate household incomes.

  2. Married but living apart: If an individual lives apart from his/her spouse and meets certain tests, that individual may be able to file as head of household and may be eligible for tax credits, even if s/he is not divorced or legally separated. To qualify for head of household status on the last day of the year, you must meet all of the following: a. File a separate return; b. Paid more than half the cost of keeping up your home for the tax year; c. The spouse did not live in the home during the last 6 months of the tax year; d. Your home was the main home of your child, stepchild, or foster child for more than half the year; AND e. You must be able to claim an exemption for the child.

You could always get divorced and live in sin with each other, as roommates “with benefits”. How wonderful life is now that the Defense of Marriage Act is dead, too.

This is a game that married Social Security beneficiaries once had to play, too, in order to maximize their retirement income benefits.

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