How long your child can stay on your health plan depends on whether or not you want to pay for it. Although many states have already made coverage available for adult children to the age 26, in what has been referred to as the “couch potato law”, the Affordable Care Act (ACA) aka Obama Care has made it a federal requirement.
Employers and insurance companies are required to allow parents the option of insuring their children to age 26 (up to 30 years old if child serves in the military), but parents are not required to carry their children. If a parent cannot afford or simply does not want to carry their child on their plan, ACA has no penalty.
There is no question that dependent coverage under ACA had become more expensive and employers have largely passed on increases to their work force. In addition, all medical plans that are not grandfathered are required to carry extra coverage for pediatric dental, maternity, breast pumps etc. People that were looking for coverage for catastrophic events are now forced to buy coverage that they will never use.
Consumers’ ability to custom design plans has become less flexible under ACA. So, what if you decide to drop your child off your medical plan before age 26? Well, really nothing to you, but your child will need to secure medical insurance or they will face a fine from the federal government.
Adult children may find that coverage is less expensive off their parents’ plan. If your child is not attending college and is not a deduction on your income taxes, there is a possibility that they may qualify for a tax subsidy through a state or federal exchange. In some cases depending on their income they may qualify for Medicaid. Parents and children should not assume that their current group plan is the best option.
While there are number of good reasons why medical insurance should be extended to children, a one size fit all approach as adopted by the federal government has not been good for the consumer.
If you have questions about medical plans for dependents, please call us at 800-317-0181 or write us at information@Benefitsage.com.