Will I have to pay back my insurance company??

Question

Say I have a dependent on my health insurance. She had several doctor appointments that were paid (minus a copay) by this insurance. But she was living with a relative for more than 9 months of the year and they want to claim her on taxes. Will my insurance company deem her no longer a dependent because of this and require me to repay them for those appointments during that year?

Well, she is my daughter, but she was living with a relative for most of this year. So the relative wants to claim her as a dependent on taxes, but I want to make sure my insurance company won't then tell me that since she was THEIR dependent, she wasn't MINE, and therefore have to reimburse for her doctor bills.

Answer 1

Actually, its possible...if your employer does a dependent audit.

I work on dependent audits. Generally, when a company does an audit, they request a copy of the birth certificate (to show proof of parenthood) and a copy of your most recent tax return showing that child claimed as a dependent (to show proof of financial dependency).

However, *most* employers who do dependent audits offer some sort of amnesty provision - they don't go after back medical expenses, but they do kick the dependent off the plan for future expenses.

Would this happen to you? It all depends upon whether or not your employer does a dependent audit. They're becoming much more common. It also depends upon whether your employer's eligibility criteria to be on the plan requires the child to be financially dependent upon you, or whether just being a biological child is sufficient.

(Here are some recent news articles about dependent audits and the kind of information that's requested of you during an audit:

http://www.stltoday.com/stltoday/business/columnists.nsf/maryjofeldstein/story/9EFD7B3F63A09F8C862573A80011001D?OpenDocument

http://online.wsj.com/article/SB118946144721423027.html?mod=googlenews_wsj

http://www.baltimoresun.com/business/bal-bz.ambrose07oct07,0,3205560.column?coll=bal_about_promo )

Answer 2

If that dependent is your child, it should not make a difference for this year or for expenses paid while she was your dependent. However, I would check with your agent to be sure of the rules with that particular company

Answer 3

I don't know how the insurance company would know whether or not you claim your daughter as a dependent on your taxes.

Answer 4

A dependent for income tax and a dependent for health ins coverage are two entirely different things.