When Health Plans Aren't Required to Cover Adult Children

Although the health-reform law requires most insurance plans to extend coverage to adult children until age 26, the rule doesn't apply to retiree-only plans.

I have retiree health insurance from my former employer. The insurer says it can drop my son’s coverage if he stops being a full-time student because he is older than 19. I thought the new health-care-reform law required employers to provide coverage to children until they reach age 26. Who is right?

Your former employer is right on this one. Even though the health-care-reform law requires most insurance plans to extend dependent coverage to adult children until age 26, there’s an exception for retiree-only health insurance plans. Health plans that cover only retirees (not those that cover current employees or a combination of current employees and retirees) are not subject to the rules requiring dependent coverage to last until age 26.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.