Understanding the fine print of the IRA is not always a fun task – but it’s necessary


Writing the story on the Griffon Gateway Program for this issue brought back bad memories for me involving the IRS and insurance companies – two of my least favorite things.

I kept wondering why it seemed like I was one of the few people on campus who understood that parents cannot claim their child over the age of 19 as a  dependent unless said child goes to school full time for some part of any five month period during the tax year. In other words, here at Western, that means either the spring or fall semester.

That’s when I remembered the bad experience involving dependent coverage with my husband’s employer, Ford Motor Company. We tend to remember lessons that we learn the hard way.

Like many employers, including Missouri Western, Ford provides medical  insurance for its employees and also offers dependent coverage. Just as the term implies, the coverage is reserved only for those people that employees can claim as a dependent on their federal income taxes.

This is where it gets tricky, and many employees at Ford got no treats when the company suddenly began doing audits to make sure that the dependents receiving the benefits packages were indeed dependents. Instead, many of my husband’s friends got their checks rocked – garnisheed for repayment of thousands of dollars in insurance premiums that were paid out by Ford for children who were not truly dependents.

Now, in Ford’s defense, they are not doing too well in the profit department. (Okay, they suck at making profits.) And in many cases, including here at Western, the employer pays the insurance premiums. So, I can understand why they needed to put a halt to paying medical insurance premiums out for children of employees who were no longer dependents. But the truth is that it was an honest mistake on the part of these employees.

Why? Because they did not understand that a parent cannot claim their child over the age of 19 as a dependent unless said child goes to school full time. In hearing what was happening to other people at Ford, I started researching. I made certain what the tax laws were concerning the ability to claim my adult children as dependents to avoid repayment of insurance premiums.

Now, this is where you, the student, enter the equation. Besides medical  insurance, there are other benefits that you and your parents will lose if you drop to part-time status for an entire calendar year. You need to keep mom and dad apprised of your honest intentions. If you are still living at home or in the dorms and you tell your parents that you are going to attend classes full time, don’t drop any classes to put you below the 12 credit hours. Don’t change your mind. Because when you do, there can be hell to pay. And your parents are the ones who will pick up the sweltering tab.

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