Adult Children’s Coverage to Age 26
One of the goals of the Affordable Care Act (ACA) is to provide access to health insurance to a larger percentage of young adults.[i] And now children are eligible to be covered on their parents’ health insurance plans until age 26 as long as they do not have an offer of health insurance coverage from their own employer.
This applies to all children under the age of 26 who are currently covered by their parents’ healthcare insurance regardless of whether they have:
- Moved out
- Graduated from college
- Gotten married
At a Glance
Adult children under the age of 26 are eligible to be covered by their parent’s health insurance coverage under the following circumstances:
- The parent has employer sponsored group health coverage. Depending on the employer's policies, the parent may have to pay all or part of the premium cost for the child. Employers rarely cover the full premium cost of dependent coverage. Enrollment of the child can only occure during the open enrollment period unless the child is already covered on the parent's plan.
- The parent purchased their health insurance directly on the Individual market (not through an employer or group).
The following exception exists until the Affordable Care Act is fully implemented in 2014:
- The parent’s Plan or Policy is a “grandfathered health plan”. Grandfathered benefit plans are plans that were in effect on March 23, 2010 and have not made significant changes that reduce benefits or increase member deductibles, copayments or coinsurance
- The adult child is offered health insurance coverage from their employer.
Click on the following for more information:
Young Uninsured Adults Under 19
Insurers cannot deny you insurance or charge higher rates if the child is under the age of 19 even if the child has a serious illness in the past or have one now. In 2014, this will apply to everyone. For more information, go to the section entitled Coverage for Pre-existing Conditions on this website[ii].
Young Uninsured Adults Under 26
Young adults up to the age of 26 are eligible to be covered by their parents' health insurance plan. Insurance plans can’t charge more or offer fewer benefits for young adults than they do for young children. If the young adult cannot enroll, has a pre-existing condition, and has been uninsured for at least six months, there are special insurance plans available - for more information, go to the section entitled PCIP on this website.
There are tax benefits that help make it affordable for parents to provide coverage for their young adult children. Please consult a tax specialist for detailed information about how to report these items on your tax returns:
- The value of employer-provided health coverage for an employee’s child is excluded from the employee’s income through the end of the taxable year in which the child turns 26.[iii]
- Employees may pay the employee portion of the healthcare coverage for an adult child on a pre-tax basis through the employer’s cafeteria plan (a plan that allows employees to choose from a menu of tax-free benefit options and cash or taxable benefits). [iv]
[i] US Dept of Health and Human Services, (2010, November 12) www.hhs.gov/ociio/regulations/adult_child_fact_sheet.html
[ii] The California Endowment., (unkown publication date). Youth and hr handout-2 (tce).pdf. Retrieved from http://calendow.org/Article.aspx?id=4765
[iii] US Dept of Health and Human Services, (2010, November 12) www.hhs.gov/ociio/regulations/adult_child_faq.html
[iv] US Dept of Health and Human Services, (2010, November 12) www.hhs.gov/ociio/regulations/adult_child_faq.html