At what Age is a Child Responsible for Medical Bills? – Overview
All health insurance carriers offer adults and their dependents to remain on the same family health insurance plan.
This is in line with the latest Patient Protection and Affordable Care Act (ACA). This rule mandates that children can be part of their parent’s health insurance plan till they reach the age of 26 years.
This regulation makes adults eligible for health coverage regardless of financial dependency, student status, marital status, employment status or residency.
This applies to all insurance plans in the specific market. It also extends to almost all employer-sponsored health insurance plans too.
These may include large groups, small groups and also self-funded insurance plans.
Extension of Dependent Coverage
Section 2714 of the PRACA & HCERA Public Laws 111-148 and 111-152 dictates:
“(a) IN GENERAL – A group health plan or an individual health insurance plan that offers dependent coverage to children shall continue to offer the said coverage for an adult child until they turn 26 years of age.
Nothing in this section will require a health plan or insurance issuer described in the preceding sentence to offer coverage to the child of a child receiving dependent coverage.” (As revised by Section 2301(b) of HCERA)
“(b) REGULATIONS – The Secretary shall proclaim regulations that define the dependents to which insurance coverage shall be made available under subsection (a).”
“(c) RULES OF CONSTRUCTION – Nothing in this section shall be interpreted to alter the definition of ‘dependent’ as used in the Internal Revenue Code of 1986 by the tax treatment of the cost of insurance coverage.”
Role of the State in Extension of Dependent Coverage
The state legislature dictates the extension of coverage for young adults. This is the same way it provides coverage for young adults under their parents’/guardians’ health insurance plans. This is true for many ACA provisions.
Before implementing ACA, around 31 states needed insurance providers to extend coverage to young adults.
The specific age at which insurance providers discontinued coverage to young adults under their parents’ plans varies from state to state.
Apart from this, some states also required young adults to meet certain eligibility criteria to get coverage under their parents’ insurance plan.
For instance, many states required the dependent adult to be unmarried to qualify for dependent coverage.
Unless they can prevent the application of ACA regulations, states may continue to follow existing laws for extending dependent insurance coverage.
Similar to other state health insurance statutes, the state allows state insurance departments to educate the public.
They are required to enforce and implement these mandates directly. This includes implementing state-specific and state court penalties.
Local and state governments are required to notify of enrollment opportunities to anyone below 26 years of age once their coverage has ended.
Action by State to Extend Dependent Coverage
The ACA is a federal law and applies to all young adults living in different states. After coming into effect in 2012, the ACA is being followed by the below-listed states:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
The laws vary considerably from state to state in terms of eligibility criteria. Around 30 states have extended dependent insurance coverage despite student status.
The majority of states required young adults to be single and financially dependent on their parents. This is necessary to qualify for dependent insurance coverage.
Cost Sharing of Extended Dependent Coverage
The cost for notifying eligible individuals about new enrollment opportunities is shared between the employers and insurance providers.
The expense of covering young adults with extended health coverage is borne by the family and the employers of the newly covered young adults.
If a family does not have employer-sponsored health insurance then the cost of coverage of young adults falls on the parents.
For families that qualify for State regulations also share the costs with families. An eligible young adult cannot be made to pay more for coverage than other similar individuals who have not lost coverage due to their dependent status.
As regulations governing young adult dependent insurance coverage vary from state to state you should enquire of specific criteria from your insurance provider.
For additional details on regulations regarding young adult dependent insurance, you can visit the IRS official website at www.irs.gov/pub/irs-drop/