Most Children Can Stay On Their Parents Plan Until Age 26

David J. Rubin is a fact checker for The Balance with more than 30 years in editing and publishing. The majority of his experience lies within the legal and financial spaces. At legal publisher Matthew Bender & Co./LexisNexis, he was a manager of R& D, programmer analyst, and senior copy editor.

The Balance / Laura Porter

Current federal law enables you to remain on a parents policy up to age 26, and some state laws allow you to keep the coverage even longer.

When its time to get your own coverage, its important to know how to get a policy and understand the type of plan that will best fit your needs. Some plans offer more affordable premiums, while others pay more health care costs. But whats most important is that you continue health insurance coverage, even if youre young and healthy.

How Do I Keep Them On My Policy After They Turn 26

Parents need to apply to their employer or insurer for this coverage, as each company has different requirements. It is not a good idea to wait until the last minute after youve received notice that because your child is turning 26, they will be terminated from your policy. Instead, we recommend parents notify their employer or insurer as early as possible ideally several years before their 26th birthday that their child has a disability and will need to remain on the policy.

When Should You Add Parents To Your Plan

Now lets switch gears because a time may come when it makes sense for you to no longer be on your parents insurance. Instead, your mom or dad may need to be on yours.

For example, there are a few key times when you may want to consider adding your parents to your health insurance plan.

• If they are no longer working and do not have access to health insurance through their own employer, then they will need to find another way to get coverage.
• If your parents are nearing retirement, they may be considering insurance options. In this situation, its important to weigh costs and benefits before deciding.
• If you have newly gotten married or had a child recently, you may want to add your parents to your health insurance plan to provide them with coverage.

If youre looking to add dependents to your insurance plan, do so during the open enrollment period. On the other hand, if you have a qualifying event, you might be able to add a dependent outside of open enrollment.

A qualifying event is usually something like getting married, having a child, or losing coverage. The best way to ascertain if you qualify for an exception is to call your insurance company and simply ask.

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Do Young People Really Need Health Insurance

If youre healthy, you might not think you need health insurance until youre older. But consider this: Treatment for a broken leg can cost up to $7,500, and a hospital stay can cost $10,000 per day, according to the U.S. Centers for Medicare and Medicaid Services. If you dont have health insurance, youll have to shoulder the entire cost of medical expenses if you sustain an injury or become ill.

Nearly 20% of households have delinquent medical debt and about 9% of households have at one time filed bankruptcy due to health care expenses, according to a 2019 survey conducted by the Kaiser Family Foundation and the Los Angeles Times.

Also, consider the potential for future health problems. Federal law doesnt allow ACA-compliant insurance plans to deny coverage for a preexisting condition such as diabetes or heart disease, as of May 2022.

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Parents often keep their children on their health insurance plans until theyre well into their 20s and can reliably maintain their own coverage. But as children grow up and parents age, some kids begin to question: Can you put your parents on your insurance? The answer to the question depends on the company that provides your insurance.

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Who Can Be Added As A Dependent On My Health Insurance Plan

When you purchase a health insurance plan for yourself, you can get coverage that extends to your dependents likewise, if youre an employer covering your workers, you can provide coverage for any dependents they have. If youre planning on purchasing a family health insurance plan to cover your dependents, its important to make sure you know theyre eligible to join your family health insurance plan before you make your final purchase.

If I Get Married Can I Add My Spouses Child To My Health Plan Is There A Time Frame In Which Enrollment Must Take Place

A stepchild is an eligible to stay on a parents plan up to the age of 26. If your coverage is through an employer group plan that provides benefits to children, youre given at least 30 days to enroll the new dependent.

An eligible child can be a biological child, adopted child, stepchild or foster child, according to the Affordable Care Act. The child doesnt have to live with you, be a student or still be in school to be covered by your health coverage.

The federal rule states you have at least 30 days, but an employer could give you a longer period, says Rich Gisonny, senior consultant at Towers Watson in White Plains, New York.

This gives employees a reasonable period to make a decision and complete the enrollment.

However, employer-based coverage doesnt have to cover children. Gisonny says theres no employer mandate that it must cover employee families.

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May Group Health Plans Insurance Companies Or Hmos Impose Deductibles Or Other Cost

Yes, but only if the deductible, coinsurance, or other cost sharing for the later part of a 48-hour stay is not greater than that imposed for the earlier part of the stay. For example, with respect to a 48-hour stay, a group health plan is permitted to cover only 80 percent of the cost of the hospital stay. However, a plan covering 80 percent of the cost of the first 24 hours could not reduce coverage to 50 percent for the second 24 hours.

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Can I Drop My Spouse Off My Health Insurance If We Are Separated

You likely will have to wait to remove your spouse from health insurance until the divorce is final. Until then, the spouse is eligible to stay on your health plan.

That side, your spouse can decide to get removed from your health coverage and get their own health plan. Losing coverage through a separation or divorce starts a special enrollment period for the spouse.

During special enrollment, you can get individual health insurance directly from a health insurer or the health insurance marketplace. Or the person may get a health plan from another job, if eligible.

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Dependent Care Flexible Spending Account

Dependent care flexible spending accounts aren’t health plans but can still be invaluable for family caregivers. This spending account allows you to set aside pre-tax cash allocated for a dependent’s health services and care. Not all employers offer a dependent care flexible spending account, so check with your employer first to see if you can save a little money while taking care of your parents.

You can add dependents to your plan during the open enrollment period or if you have a qualifying event like a new job or change of address.

What Should I Be Doing Now

• If your adult child with a disability is under 26 and covered on your policy, contact your insurer or employer to learn what specific steps you need to take to keep them on your policy at 26.
• If your adult child with a disability is under 26 and not covered on your policy, consider adding them back to your policy now.
• If your adult child with a disability is over 26, it is still worthwhile to ask your employer or insurer whether they might still allow you to include this child under your policy.

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Private Health Insurance Plans

Individual policies may also be purchased directly from private health insurance companies. If your parents aren’t likely to qualify for a marketplace subsidy, private health insurance may be a good choice for coverage. If your parent can’t afford a traditional plan, many private plans offer affordable alternatives such as high-deductible plans. A licensed agent or broker can help you find a plan that suits your parents needs and fits in your budget.

Medical Underwriting Requirements And Limitations

One of the most common factors used to determine the face value of a life insurance policy is income replacement. Because children rarely generate an income, there are limits as to how much life insurance can be taken on a child. Insurance is generally evaluated on a case-by-case basis depending on the need and purpose that is demonstrated. While there is no fixed number for the benefit amount, the ceiling is often lower for a child than an adult due to the human life value, or lack of earning power a child has.

In most cases, grandparents only need to provide some basic facts like Social Security number and address of the child in order to purchase a policy. Each state has different requirements, and some require the consent or signature of a parent prior to taking out a policy on a child. For this reason, it may be a good idea to seek permission from a parent prior to starting the process.

Generally, there is not much medical underwriting involved in a child policy. Usually children do not have to undergo a physical exam if they were born healthy and remain so. But the parent or guardian may be required to answer some questions regarding the childs present health and family medical history.

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Q: It Seems Like Plans And Insurers Can Terminate Dependent Child Coverage After A Child Turns 26 But Employers Are Allowed To Exclude From The Employees Income The Value Of Any Employer

Under the law, the requirement to make adult coverage available applies only until the date that the child turns 26. However, if coverage extends beyond the 26th birthday, the value of the coverage can continue to be excluded from the employees income for the full tax year in which the child had turned 26. For example, if a child turns 26 in March but is covered under the employer plan of his parent through December 31st , the value of the health care coverage through December 31st is excluded from the employees income for tax purposes. If the child stops coverage before December 31st, then the premiums paid by the employee up to the time the plan was stopped will be excluded from the employees income.

When Should You Add Your Parents To Your Health Plan

Some insurance companies will allow you to add a parent that is a dependent to your health plan so long as you’ve already listed your parent as a legal tax dependent. Your parents must have earned less than $3,700 annually and you must be able to prove that you provided at least half of their financial needs, which can include housing, food, transportation and more. To add them to your health insurance plan, you must meet specified dependency guidelines as set by your insurance carrier which can vary from company to company. Many insurers require proof that your parent lives with you and is on your tax return as a dependent.

Your parents cannot be someone elses legal dependent.

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Repaying Health Insurance Benefits

There are good reasons to notify your employer of a divorce once its final. If you dont, you could face repercussions.

First, you could be liable for any benefits the health plan pays for your ex.

If you dont tell them and there is a claim, the insurance company can try and recover the cost of the claim from you, Tassey says.

Legally, you would have to reimburse your health plan.

Your ex-spouse will become liable for all medical expenses from the date of the divorce unless he or she opts for continued coverage through COBRA, Jurney says.

Second, there could be tax implications. An exs coverage cant be paid for with pre-tax dollars.

The value of the health coverage provided to the ex-spouse is taxable to the employee, to the extent it is not paid for with post-tax dollars, says Sonkin.

Examples Of Dependent Coverage For Health Insurance

TRICARE, the coverage plan for military families, offers limited coverage for parents and in-laws of members of the military. This coverage comes through TRICARE Plus, which offers free treatment in military hospitals and military primary care facilities if the parents or in-laws meet criteria and have been registered as dependents in advance.

At Bank of America, for example, employees options for health insurance include an employee plus one other adult plan. Bank of America spokesman Ferris Morrison says parents are eligible for coverage as long as they a set of guidelines similar to the IRS guidelines.

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The parent has to be under age 65, claimable as a dependent for federal taxes, live with the employee and not be enrolled on Bank of Americas health plan for retired workers, Morrison says.

Most corporate plans limit dependent coverage to children and domestic partners. However, its worth checking with the human resources representative at your workplace to find out whether youre able to extend dependent coverage to your parents.

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How To Add A Parent To Your Health Plan

Health plans that allow parents to be added to a plan likely require that you meet certain conditions, like claiming them as dependents on your federal income tax return. In order to declare one or both parents as dependents, you must meet the following requirements:

• Your parents must be a citizen or residents of the United States

• Your parents must have a taxable income of $3,700 or less annually

• Your parents cannot be someone else’s legal dependent

• Your parents cannot file a joint tax return

• You must have paid for half of their financial needs, such as food, housing and more

Most insurance providers allow you to add dependents to your plan during the open enrollment period, which typically runs from November until the end of the year. The marketplace’s special open enrollment period runs through August 15th as a response to the COVID-19 pandemic. You may also make changes to your plan outside the open enrollment period if you have a qualifying event.

Adding A Parent To Your Policy

If your health insurer allows parents as dependents, youre in luck. You can move forward with adding your mother to your policy. First, make sure you meet all of the dependency requirements. This usually means that your mother is living with you and that youre providing financially for her, although requirements may vary from company to company. This is a great time to talk with your provider to discuss your options.

If your mother is eligible under your policy, contact your insurer to add her as a dependent. In most cases, this should be done during open enrollment, the time period when you are eligible to make changes to your plan. Open enrollment runs nationally from November 1 through December 15, although some states extend it for a longer period.

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Health Insurance Options For Turning

If you find yourself aging out of your parent’s health insurance policy, you have a few coverage options to choose from:

• Employer-offered coverage: If you have a full-time job, then you may be offered a company health insurance policy through your employer.
• School-based coverage: If you are attending a university, then the school may offer its own health insurance policy to full-time students. This can be an affordable option for many graduate school students who may be getting older and aging out of their parents’ policies.
• Individual health insurance: If you do not have access to health insurance through work or school, then you can still get affordable coverage through your state health insurance marketplace. Furthermore, you may be within an income threshold to be eligible for premium tax credits.
• Medicaid or the Children’s Health Insurance Program : When applying through your state health insurance marketplace, you will be asked about your income. Depending on your income level, you may be eligible to enroll in your state’s Medicaid program.

Can I Add My Parents To My Health Insurance Plan

Health plans typically limit the definition of dependents to a spouse and children. Even if a parent is a tax dependent and lives with you, you typically wont be able to add the person to your health coverage. The same is true is the parent isnt yet eligible for Medicare.

Gisonny says that theres no federal mandate that an employer health plan must cover an employees parents. Some plans may, but theyre in the minority.

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