Insurance

Keeping Adult Children Insured

Here's what you need to know about how the health-care reform law benefits families that want to keep their grown kids on their health policies.

I’ve already written two columns in response to readers’ questions about the new health-care-reform law and extending coverage to adult children, Putting Adult Children Back on Your Health Plan and New Grads and Health-Care Reform. Since then, the U.S. Department of Health and Human Services and the U.S. Department of Labor have issued regulations that clear up some of the details of how the new law will be implemented.

I understand that health insurers must let adult children up to age 26 stay on their parents’ policies starting six months after the law was passed, which would be September 23, 2010. But my employer isn’t changing its rules until January 1. Is this legal?

Yes, this is legal, and this will be the case with many health plans. Under the new law, insurers that offer dependent coverage must let adult children stay on their parents’ policies until age 26, starting with the plan year that begins after September 23. Most health plans work on a calendar-year schedule, so the new rule generally takes effect on January 1, 2011. Insurers must provide an open-enrollment period of at least 30 days for children who qualify for this coverage, starting no later than the first day of the new plan year. Ask your insurer or human-resources department about the timing and the steps you need to take to reinstate children who have aged off your policy.

My son is about to graduate from college, but my insurer’s new plan year doesn’t start until January 1, 2011. Will he get kicked off my coverage until the new rule takes effect?

Probably not. As of mid May, more than 65 insurers have offered to let new grads who are currently covered under their parents’ policies keep their coverage. This helps insurers avoid the hassle of removing kids from a policy and then re-enrolling them a few months later.

If your employer self-insures its health plan, however, it may not be extending coverage to grown children before the new rules require it to do so, even if the plan is administered by an insurer that is offering the early coverage to its own policyholders. Ask your HR department about its rules.

My son works for a company that offers health insurance to employees, but the coverage is expensive and not very good. Our policy is much better. Can he be covered on our policy instead? He’s younger than 26.

No. The new rule doesn’t currently apply to adult children who have an offer of coverage through an employer. Beginning in 2014, however, children up to age 26 may stay on their parents’ health plan, even if they are offered coverage through their employer.

My 25-year-old son is married, but his employer does not offer health insurance. Can I cover him on my health policy?

Yes. All children younger than 26 who are not offered health coverage at work, regardless of whether they’re married, may be covered on a parent’s plan. But your coverage does not extend to your son’s wife or his children .

Most Popular

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
April 14, 2021
The Wrong Way to Achieve Wealth
personal finance

The Wrong Way to Achieve Wealth

For some down-to-earth, basic advice on money and life, I have a book to recommend: “Your Total Wealth: The Heart and Soul of Financial Literacy.”
April 17, 2021
2021 Child Tax Credit Calculator
Tax Breaks

2021 Child Tax Credit Calculator

See how much money you'll get in advance under the new child tax credit rules for 2021.
April 14, 2021

Recommended

Medical Expenses Retirees (and Others) Can Deduct on Their Taxes
tax deductions

Medical Expenses Retirees (and Others) Can Deduct on Their Taxes

The list of medical deductions is broad and includes items such as expenses for service animals and the cost of long-term care.
April 14, 2021
RV Insurance: Everything You Must Know
insurance

RV Insurance: Everything You Must Know

Selecting the right RV insurance is a big decision to protect your investment. Here's what you should know about the costs and different coverage type…
April 1, 2021
20 Ways to Save on Health Care
health insurance

20 Ways to Save on Health Care

From maximizing insurance benefits to shopping for discounts to funding tax-advantaged accounts, these tips will lower your costs no matter how you ge…
March 31, 2021
Deduct Expenses for Long-Term Care on Your Tax Return
Long-Term Care Insurance

Deduct Expenses for Long-Term Care on Your Tax Return

The IRS allows some limited tax breaks on medical expenses and insurance premiums related to long-term care.
March 23, 2021