Health insurance and dependent child status

My daughter will be 24 this year, so will not qualify to be considered a dependent as she will have a summer paying job (hopefully). My husband is retiring and the health insurance company is asking for tax records to prove she is a dependent. Doesn’t the insurance company have to provide health insurance to her to age 26 even if she is not claimed as a dependent on our tax return?

Per CFR § 147.120 With respect to a child who has not attained age 26, a plan or issuer may not define dependent for purposes of eligibility for dependent coverage of children other than in terms of a relationship between a child and the participant (in the individual market, the primary subscriber). Thus, for example, a plan or issuer may not deny or restrict dependent coverage for a child who has not attained age 26 based on the presence or absence of the child’s financial dependency (upon the participant or primary subscriber, or any other person); residency with the participant (in the individual market, the primary subscriber) or with any other person; whether the child lives, works, or resides in an HMO’s service area or other network service area; marital status; student status; employment; eligibility for other coverage; or any combination of those factors.

https://www.govinfo.gov/content/pkg/CFR-2018-title45-vol1/xml/CFR-2018-title45-vol1-part147.xml

However if this is a grandfathered (pre-2010) plan which did not previously cover your daughter then you may not be allowed to add additional people to the policy.

Maybe they didn’t realize she was under 26?

I talked with H’s insurer. They were fine with keeping both of our kids on the family plan until they turned 26, even though S was supporting himself, living 5000 miles away, employed full time, and had access to a subsidized insurance plan from his employer. He chose not to get employer subsidized coverage until he turned 26 and H’s insurer said that was fine and actually financially prudent. His turning 26 was a qualifying event, for him to be able to choose his insurance plan (self only).

I’d speak with your HR and/or insurer to get clarification.

Is your DH paying for his own health insurance after he retires or do you mean he is medicare eligible now? Is it the same insurance company you have had previously?

Hmmm…if your husband no longer has a plan with his company…how can “his plan” provide dependent or kid coverage?

Is there some sort of provision for continued coverage for family members who were part of the family plan once that family plan is no longer one the employee takes?

Depends on the type of plan. If he is continuing his employer’s group plan through COBRA and it’s not grandfathered, they have to cover her to age 26. If his employer offers a separate retiree plan, a retiree-only plan does not have to follow the ACA requirements for covering dependents.

@Coun2316

And if the policy holding parent is no longer taking employee health coverage at all? Like if they go on Medicare?

Then what?

When I retired, the retiree health plan was separate from the employee’s health plan. The employee health plan followed the Obamacare rules while the retiree plan was a grandfathered plan.

The retiree plan would cover the kids as long as they were dependents and not covered by any other health plan (meaning if they were OFFERED health insurance even if they declined it). A student working a summer job could still be a dependent if the parents provided over a certain level of support for that tax year (I think it is 50% but it follows the IRS rules). The age up to which the grandfathered plan would cover dependants was 25 instead of 26. All these grandfathered rules were the rules in place before Obamacare.

I understand if the company offers retiree health insurance.

What about when the policy holder retires from the company and goes on Medicare??

What happens to the dependents at that point…since the employee no longer has employee coverage???

The parent has to be in a group plan that requires coverage to age 26 for the child to remain eligible. If the husband switches out of the group plan, the rest of the family switches out too.

My friend is younger than her husband. He was laid off at about age 62 and they went on cobra for a few years (company kept him on insurance for about a year, then they had to pay the cobra). At that time husband went on medicare, their son was on medicaid (he was under 26 but has Down syndrome) and my friend had to buy her own policy. There was no group policy for her to join.

When the person retires, that triggers a COBRA event for the dependents - so she can take COBRA herself. Or if the whole family goes on COBRA when the person retires, once he becomes Medicare eligible, they have another COBRA event - I think they get another 36 months

We were fortunate that H was able to retain the family plan medical insurance when he retired and we can keep it as long as he or I am alive. It covers medically disabled dependents, that we did paperwork for to get them declared as medically disabled dependent.

If any of us were to lose coverage, it would be a qualifying event, allowing us to buy cobra or select coverage from plans that were allowing enrollment.

@thumper1, the answer to your question is no. Medicare does not cover dependents. This is because Medicare is individual insurance.

@kelsmom I know Medicare doesn’t cover dependents.

What I was asking is…how do dependents get coverage when the policy holder retires from a job…and goes on Medicare.

Can the dependents get Cobra? Might it be smarter for a 24 year old to shop on the ACA exchange because losing coverage would be a qualifying event.

Yes, the dependent is eligible for COBRA, assuming the company has 20+ employees (required if the company has 20 or more employees … although a smaller company could probably choose to offer COBRA, I would think). The notification will be sent to the dependent’s address on the employer’s records. COBRA charges vary … it was very reasonable for S when he aged out, but I used to work with companies that charged a LOT for COBRA. The minimum time for COBRA coverage availability is 18 months, I think, but companies can choose a longer period (S could have been on COBRA for 3 years). There is a limited window during which the dependent can elect COBRA; if they miss it, they are out of luck.

For us, my kids were only eligible for up to 18 months of cobra, and it was 2% more than the cost of the premiums for a single person under the group plan because the policyholder had to pay the 2% admin expenses employer had been absorbing plus, pay both the part employer had been paying and the portion employees normally paid.

It was a qualifying event so for S when he turned 22, we were able to get him a lower premium cost policy with higher deductible and worse coverage for a few months. After Obamacare kicked in, he was covered again on 1/1/2010, until he again aged out for good upon turning 26.

@thumper1 that has been our situation for several years. Kids are on Medicaid if their income is low enough (in our state Medicaid considers anyone over 18 as their own "household:), or one of many plans through the Affordable Care Act. In our state, you can go to financial counseling at hospitals and get put on a plan that very day. Or, you can apply on the portal.

We are very afraid of the ACA completely going away. And in some states Medicaid poses a lot more obstacles to care than in our own state, we happen to know through the experience of one of our kids.

Some young adults work part time at certain employers, like Starbucks, which offer health coverage. Others get individual health insurance policies, which are usually quite reasonably priced for healthy young people.

This is how we’ve handled it. Although those individual polices were much, much less expensive for young people before the ACA. If you are close to retirement age, buying individual insurance post-ACA is much less expensive in part because its being heavily subsidized by making the policies for young people much more expensive. Pre-ACA, there were catastrophic polices for the under-30 crowd for less than a couple of hundred dollars a week. So the ACA has helped those who are over 55 or so and at the poverty line, but made things much more expensive/difficult for the under 40 crowd and the low-medium earners. No free lunch, it’s all a tradeoff of who gets helped and who gets to pay for it.

@milee30 is this a typo…should it be over month. A couple hundred dollars a week would be $800 a month or so.

My kid’s Pre ACA individual policies were about $250 a month. Now they are $325 a month (no subsidy). Since it’s been years since the ACA passed, I attribute a lot of that to inflation.