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Putting Adult Children Back on Your Health Plan
If your kids are too old to be covered by your policy, they may be able to get back on after the health-reform law takes effect.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
April 26, 2010
Are the companies that say they will extend coverage to recent grads before the new health-care-reform law takes effect also reinstating kids who are too old to be on their parents’ health-insurance policies?
Generally, early implementation of the new rule applies only to children who would otherwise be dropped from their parents’ policies before the new law kicks in. To qualify for this early effective date (June 1 for many of the companies), children must be currently covered under their parents’ policies; adult children who have already "aged out" and want to get back on must wait until the new plan year that starts after September 23, 2010 (for many plans that means January 1, 2011, because the plans operate on a calendar-year basis). Contact your firm’s HR department or the insurer for details.
My daughter is 24 and works only part-time, without any benefits. Will she be able to get back on my policy? I don’t claim her as a dependent on my taxes.
She’ll probably be able to get back on your policy once the law takes effect. The rules are quite broad: "Adult children do not have to be dependents of the parents for tax purposes, they don’t have to be living at home, they don’t have to be full-time or part-time students, and they may be married," says Randall Abbott, senior consultant with Towers Watson, a global benefits-consulting firm. But children who have the option to sign up for health coverage through their employer cannot qualify to remain on your policy.
Regulations should be issued soon with more details about who qualifies and on the procedures for reinstating children who have been dropped from their parents’ coverage.
Other health-care news: Update on the COBRA subsidy. There’s good news for people who have been laid off recently. After several extensions, the COBRA subsidy was scheduled to expire for newly laid-off people on March 31, 2010. But Congress has okayed another extension, to May 31, 2010, for providing the 65% COBRA subsidy to people who are newly laid off. The subsidy lasts for up to 15 months.
For more information about the COBRA subsidy, see the Department of Labor’s COBRA subsidy page. For advice about how to find coverage after COBRA expires, see How to Cope Without COBRA.
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Reader Comments (5)
Posted by: Arlen at 04/26/2010 05:31:47 PM
Our grandson graduated this past semester but has not been able to find a job. He will be 26 in May and will be dropped from his parents' health plan so will go on cobra which is only offered for 18 months and quite expensive. If he is still unemployed at the termination of this policy, will he be able to get health insurance under the new health plan that was passed? He has been accepted for law school and might choose to be a student again, how might that affect his choice of health insurance?
Posted by: Michelle Lynch at 04/28/2010 10:32:30 PM
if I get a increase in earnings does this move my salary to a higher tax bracket,will the entire salary be taxed at the higher rate? Could you please give me a example. Thank you
Posted by: Judy at 05/25/2010 03:11:41 PM
My 27 yr. old Bipolar son Diagnosed finally because he had no insurance in Jan of 2009 when he was 25, still has no insurance. He is seeking Social Security. If he gets it it maybe 2-3 more years . He has lived mostly on the streets. Will this in any way help people like him? People just do not know unless it is happening to their family members the hell families go through trying to get help and care for mentally ill people. It is Taboo in America to be mentally ill. Our Health Insurances do not even cover our mental health, a good part of what our brain does, our eyes (vision/glasses), hearing, and teeth anymore. You have to be able to afford separate policies. That or wait until it is so bad an infection turns it into something that falls into "Medical" insurance coverage!!!
Posted by: Jim at 06/16/2010 04:50:37 PM
If an adult child works for an employer that offers healthcare as a benefit, can the adult child opt out of his or her employer's plan so he or she can go on his or her parent's plan that may be cheaper or cover more? Likewise, if an employer is genourous in their health benefits, how can they keep lots of employee's children from dropping their own employers' plans and putting a burden on the parent's employer's plan?
Posted by: Lori at 08/31/2010 07:35:07 PM
I am concerned about something as far as keeping adult college grads on our insurance plan. What happens if they want to guy/girl live together & not even living at you address? Am I still responsible for the extension of my health insurance plan till age 26? I agree if they have graduated and are looking for employment and living at home or are a grad student and still attending, but this is a little much I think. Can you give me some feedback on this?