Prior to the implementation of Obamacare, insurance providers that offered coverage for children under a parent’s policy were allowed to deny access to coverage as soon as a child turned 18 and became a legal adult. Under Obamacare, coverage has been extended to allow parents to continue providing health insurance coverage for their children under their own policy up to the age of 26. This is true whether the child is living at home, away at school, no longer listed as dependent on parents’ income tax returns, and even adult children up to the age of 26 that are married. Even those children eligible for other forms of insurance (through employment, for example) can still retain health insurance coverage under a parental policy.
The only exception to the rule pertains to grandfathered plans. Families that maintained private plans (i.e. not provided through an employer) obtained prior to Obamacare may not be eligible to continue coverage for adult children after the age of 18. However, these children can easily obtain coverage by signing up for a new private plan through the Obamacare insurance marketplace during open enrollment periods. Otherwise, adult children up to the age of 26 are eligible for continued coverage under a parent’s plan, although dental and vision coverage may only extend to the age of 19. Of course, there are different rules for assistance such as the Children’s Health Insurance Program (CHIP), for which the cutoff age is 19, but this is separate from a health insurance policy through a parent’s place of employment or a private insurance provider.
The next question you might have is: what happens when a child turns 26? On a child’s 26th birthday, he/she is no longer eligible to be covered by a parent’s health insurance and will be dropped from the policy. This is true even if the adult child is still listed as a dependent on a parent’s tax return and living at home. So where does this leave the average adult child over the age of 26 that is living at home? There are several options to explore. If the adult child has a job, he/she may be able to enroll in coverage offered by an employer. He/she can also take advantage of a special enrollment period (SEP) to apply for coverage under Obamacare, even if the public open enrollment window has closed. This enrollment can be completed before the age of 26 to avoid a gap in coverage, or it can be completed within 60 days of turning 26.
What about 26-year-olds that are not employed or that are unable to work due to disability? Since Obamacare requires that every U.S. citizen maintain minimum essential coverage or face penalties, adult children that are no longer eligible for coverage under a parent’s healthcare insurance must apply for their own policy, either through the healthcare marketplace or via private insurance providers. In some cases, special exemptions will be granted, but it’s more likely that low- or no-income applicants will be granted affordable coverage, and some may qualify for Medicare due to disability. Regardless, Obamacare provides multiple options for coverage pertaining to adult children living at home.
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