Keeping Adult Children on Your Insurance Policy
With college graduation around the corner, parents are peppering their insurers with questions about how the new health-care reform law will affect their adult children.
The law has two provisions of particular interest to parents. One bars insurers from refusing to cover children under age 19 because of preexisting medical conditions. Another allows parents to keep their kids on their family plan even after a child graduates from college.
Until now, kids typically have been booted off Mom and Dad's insurance once they hit a certain age (that varies from 19 to 24) or once they've stopped being full-time students, depending on the terms of the policy. The new law allows you to keep an adult child on your policy until he or she turns 26.
But both of the new provisions have left consumers with questions about when the rules take effect and how they apply. Here are a few answers.
Does the law mean I can put my college graduate back on my health plan?
Not immediately. The law allows children to remain on their parents' policies until age 26, but it doesn't go into effect until sometime in the next year, depending on when it's time for a policy's annual renewal.
That means your insurer probably will allow you to enroll a college graduate when the next "plan year" starts, most commonly in January.
My child graduates from college in May. What do I do in the interim?
You can enroll your adult child in COBRA coverage until she can go back on your employer-provided plan. Or you can buy a policy in the individual market. Healthy young people can generally find insurance for less than
There's also a possibility that your insurer will allow your child to stay on the plan for the few months before the law kicks in. That's not required, but some speculate that insurers may just decide that it's silly to dump dependents who are certain to boomerang back in a matter of months.
Does it matter if my child is a dependent?
Not in the
There's one caveat: Anyone, including a working-age child, who has access to employer-provided health insurance at his own job is expected to obtain coverage through his employer.
What if the parent's coverage is better -- or less expensive -- than what an adult child could get through work?
As the law is written now, you will be able to get dependent coverage for any child under the age of 26, regardless of whether he or she has other insurance available.
But for the time being, the child can jump on your policy only if he doesn't have a employer-sponsored plan of his own.
Does that also mean the child can't get on our family plan if he can buy coverage through school?
No. The only thing that would exclude your adult child is employer-provided health insurance, Baker said.
Does the law have any long-term implications for youths trying to get coverage?
In the long run, premiums for young adults buying coverage are likely to rise fairly significantly because of a provision that restricts how much premiums can vary by age.
Currently, people over age 60 pay five to six times as much for health insurance as people under 30, said
"The age-rating issue is a big one that hasn't gotten a lot of attention," Zirkelbach said.
"This is likely to mean that people of those (lower) ages will see an increase in premiums of as much as 50 percent -- that's on top of any other changes in the law that might affect premiums," he said.
On the bright side, 2014 is also when employer coverage will be mandated and when subsidies will be available for those who can't afford to buy insurance.
What about younger kids with preexisting medical conditions? How do the rules work with respect to them?
Starting in September, children will not be subject to coverage restrictions that force people with long-standing medical conditions to pay the cost of treating that ailment out of their own pockets.
This rule, incidentally, came from a post-passage compromise between Health and Human Services Secretary
Sebelius, hearing that the industry planned to deny preexisting-condition medical coverage for four more years, sent a sharply worded letter to the industry's main lobbying group saying that her upcoming regulations would make it clear that this rule will go into full effect in September.
- Republicans Need a Plan B for Health Care
- Obamacare: The Eye of the Storm
- Health Care Bill - Aroused Vox Populi
- How the Health Care Bill Impacts Retirees
- Keeping Adult Children on Your Insurance Policy
- Many Americans Still Clueless About Retirement Saving
- How to Avoid the Marriage Tax
- The Challenge of Deducting Medical Expenses
- Health Care Reform Overhaul: What Happens When
- Older Americans Comment on Health Care Reform
- Big Changes Coming to Student Loans
- Affording a Stay-at-home Mom?
- 21 Ways to Cut Expenses in Retirement
- New Frugality Emerging for Retirement
- Gen Y to Banks: Do Better
- Deducting Hobby Expenses: Think Business
- Sadly Bad Advise Abounds on Roth IRA Conversions
- Medigap Plans Cooking Up New Alphabet Soup
- Identity Theft May Be Prelude to More Serious Crime
- Automatic Saving Plans for Emergency & Retirement Funds
- New Tax Provisions Make Filing More Complicated This Year
- Not All 401(k) Plans Are Created Equal
- Time to Prepare Your Will
- Bigger Tax Break for Writing Off Costs of College
- The Secret to Being Poor
- Bad Day? 5 Tips to Keep Your Motivation
- 8 Factors that Determine Your Final 401(k) Balance
- How to Tell if You Are Saving Enough for Retirement
- Financial Help For Women: 5 Effective Strategies
- New Credit Card Rules Triggering More Higher Fees
- Roth Conversion Can Be Good Move, But Consider These Caveats
Personal Finance - Keeping Adult Children on Your Insurance Policy
(c) 2010 Humberto Cruz,