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Tax Change Announced To Help Domestic Abuse Survivors Access ACA Insurance Subsidies

Tax Change Announced To Help Domestic Abuse Survivors Access ACA Insurance Subsidies

March 27, 2014 — The Treasury Department on Wednesday released new guidance that allows domestic abuse survivors who live separately from their spouses to file for government subsidies to offset the cost of health plans through the Affordable Care Act's (PL 111-148) insurance marketplaces, the Washington Post reports (Goldstein, Washington Post, 3/26).

Previously, married couples had to file joint tax returns to be eligible for the subsidies. However, filing joint taxes could put women in danger if they had to reconnect with an abusive spouse.

Earlier this month, a group of House Democrats -- led by Reps. Louise Slaughter (N.Y.) and Lloyd Doggett (Texas) -- in a letter urged Treasury Secretary Jacob Lew to issue guidance on the matter "now," along with proposed regulations "to prevent ongoing confusion in future open enrollment periods" (Women's Health Policy Report, 3/19).

New Rules, Extended Deadline

In a letter to the lawmakers, Treasury Assistant Secretary Mark Mazur wrote that the Treasury Department and the Internal Revenue Service would permit married couples who live separately and cannot file joint tax returns because of domestic abuse situations to file as "married filing separately" to claim ACA subsidies for 2014 (Attias, CQ Roll Call, 3/26).

The guidance states, "For victims of domestic abuse, contacting a spouse for purposes of filing a joint return may pose a risk of injury or trauma or, if the spouse is subject to a restraining order, may be legally prohibited" (Washington Post, 3/26).

Mazur added that the two agencies in the spring would release proposed regulations that address the issue and detail how people qualify for domestic abuse status.

In addition, HHS on Wednesday specified in special enrollment guidance that survivors of domestic abuse will have through May 31 to enroll in marketplace plans, rather than the original March 31 deadline (CQ Roll Call, 3/26).

Meanwhile, a government official noted that officials at the Treasury Department have privately questioned whether they have the legal authority to make such a change to the federal tax rules, although some have noted that similar rules have been made for other programs (Washington Post, 3/26).

House Democrats Respond

Slaughter said in a statement, "Survivors of domestic violence should not have to depend on their abuser to gain access to affordable health care, and I'm glad the Treasury Department will ensure that no longer happens" (Winfield Cunningham, Politico Pro, 3/26).

Doggett said in a statement that while he "appreciate[s] the prompt response to [lawmakers'] congressional request," Treasury "now needs to move forward more expeditiously to get final regulations adopted this year" (CQ Roll Call, 3/26).

Other Stakeholders React

Dania Palanker, senior health policy adviser for the National Women's Law Center, praised the new guidance but added that she hopes the rules will be extend to apply to other situations, such as abandoned spouses.

Brian Haile, senior vice president for health policy at Jackson Hewitt, said that it would be "daunting" to spread awareness about the policy change with only a two-month extension. "Domestic violence survivors deserve more than two months to relearn everything that the marketplace taught them about their eligibility," he said (Politico Pro, 3/26).