Under the Affordable Care Act, insurers are mandated to offer dependent child coverage until young adults reach 26. This provision includes plans in both individual and employer markets.
However, there are certain criteria you must fulfill in order to remain on your parents’ plan. This includes factors like living with them and being claimed as their dependent when filing taxes as well as taking responsibility financially for them.
1. During Open Enrollment
If your parents have employer-sponsored health insurance, open enrollment typically occurs between November and January and allows you to add any dependents they need covered to their plan. For private or individual policies without annual open enrollment periods requiring medical underwriting on every application, adding family members will likely only be available during an annual open enrollment window or application.
Your open enrollment period provides the ideal time for making major adjustments to your health coverage, such as switching plans or adding or dropping family members. If you miss this window, however, any necessary adjustments must wait until next year — unless an exception applies – such as special enrollment periods or life events qualify you to make those changes sooner.
An important life event can trigger a special enrollment period of 60 days during which you can sign up or make changes to your coverage, such as getting married, moving states or having a baby. More information regarding qualifying life events and special enrollment periods can be found here.
Under-26s can use the special enrollment period to obtain health insurance through the marketplace if their parents possess an eligible individual or family plan. Open enrollment usually runs between mid-February and mid-May; this can vary depending on circumstances.
Know when open enrollment occurs to make sure you can review your coverage options each year. Costs, network of doctors and prescription drug coverage can all change year to year so it’s wise to take the time to understand them all. Itemizing taxes allows you to claim tax deductions for medical expenses depending on your income level and other qualifying deductions like multiple support agreements or support tests for children of divorced/separated/living separately parents as well as kidnap rules (to name just three examples).
2. If They Have Employer-Sponsored Coverage
Parents often obtain employer-sponsored health insurance through work. Depending on the type of coverage and the parent’s employer, parents are typically obligated to cover their children up until age 26; if parents decide not to cover them however, there could be penalties under the Affordable Care Act for doing so.
As soon as a child reaches 26 and loses coverage through their parents, they must either enroll in a marketplace plan during open enrollment, or qualify for special enrollment periods to secure coverage outside the ACA marketplace. Some adult children may also have access to employer-sponsored coverage through either their spouse’s workplace or through private health insurers directly.
Parents may add their child to a work health plan as long as it meets certain requirements, such as being claimed as a dependent for tax returns. They can also add them if a life event like marriage or having children qualifies them to join individual marketplace plans – something most work plans won’t allow.
Adults typically cannot join family health plans or the marketplace outside of open enrollment periods or special enrollment periods, although if a parent loses coverage through either their employer or marketplace they can purchase individual coverage or join another household immediately.
Some parents may opt to add their adult child back onto their health insurance plan once they turn 26; this decision should not be mandated by government. Most will want to ensure their adult child has coverage if they’re still supporting financially or living at home with them; it is important to remember, though, that staying on a parent’s plan doesn’t change how dependency exemptions or deductions are claimed as this is an issue that resides with federal not state authorities.
3. If They Are Eligible for Subsidies
Under the Affordable Care Act (ACA), parents can extend their current health insurance coverage for financially independent adult children up until age 26 even if they no longer file taxes as dependents. This is an invaluable benefit to families, and allows young adults to remain on their parent’s plan without having to shop around during open enrollment or special enrollment periods (SEP) triggered by changes in income.
Rule for who qualifies as family can be confusing, so it’s essential that you fully comprehend your options. A household is determined by who files tax returns for it; that includes any spouse if applicable, as well as tax dependents. When married couples file jointly they are treated as one household for purposes of determining eligibility for Medicaid eligibility.
Individuals enrolled in off-exchange plans such as short term health insurance will only have access to an Individual Shared Experience Plan (ISEP) to switch into an Affordable Care Act-compliant marketplace plan if their income changes midyear; otherwise they will typically continue paying their premium and carry over any out-of-pocket spending credits from last year’s plan.
If you would like to include your parents on an employer-sponsored plan, check with HR first. Some plans require a certain percentage of employer contributions towards salary to remain eligible; in others there may also be income limits you must meet in order for them to remain on it.
Financially independent adults looking for health coverage through an exchange or open market must first determine if they qualify for premium subsidies (here’s an FAQ that explains their operation). You can do this using HealthCare.gov’s free online tool or calling your state marketplace’s customer service number; otherwise it may be more cost effective to shop independently.
4. If They Are Uninsured
Under the Affordable Care Act, parents who are uninsured may qualify for private health plans with government subsidies through an exchange. Usually these plans provide similar coverage as an employer-sponsored plan and are easier to qualify for than Medicaid due to no restrictions or documentation requirements limiting who can apply.
However, many states have failed to expand this option to adults who are uninsured – which could present a problem given if parents themselves are uninsured and their children don’t have coverage either. Doing so would help both parties obtain coverage more easily while potentially protecting children who might otherwise go without health coverage due to factors like cost or availability issues in private plans.
At present, 37 states have extended dependent coverage to young adults under the Affordable Care Act up to the age of 26 – an improvement over prior practice, where it was rarely possible for dependents to remain on their parent’s plan until at least 25.
In general, children living under their parent’s job-based insurance plan can remain on it until either they turn 26 years old or the plan is terminated for any reason. There may be exceptions; please check with their plan or employer to learn more.
As soon as you turn 26, if you are covered by your parent’s employer-sponsored plan and about to turn 26, it is time to seek alternative coverage. Open enrollment or special enrollment periods allow people to enroll in marketplace plans during this transitional phase; special enrollment periods apply when certain life events such as losing coverage or getting married occur. You should also assess if you qualify for premium subsidies on either exchange or Medicaid depending on household income and your parents’ current income levels; check here for this purpose.
