At What Age is a Child Responsible for Medical Bills? – Overview
All health insurance carriers offer adults and their dependents the option to remain on the same family health insurance plan.
This aligns with the latest Patient Protection and Affordable Care Act (ACA). You may often join or continue to get covered under your parents’ medical plan even if you get married or move out of your parents’ home. However, it’s recommended to check some states’ and employers’ rules as they may vary.
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 and extends to almost all employer-sponsored health insurance plans.
These may include large groups, small groups, and 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.
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 ACA was implemented, around 31 states needed insurance providers to extend coverage to young adults.
The specific age at which insurance providers discontinue coverage to young adults under their parents’ plans varies from state to state.
Some states also require young adults to meet certain eligibility criteria for coverage under their parent’s insurance plan.
For instance, many states require 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.
Like 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.
Once their coverage has ended, local and state governments must notify anyone below 26 of enrollment opportunities.
Action by State to Extend Dependent Coverage
The ACA is a federal law that applies to all young adults in different states. After coming into effect in 2012, the ACA is being followed by the below-listed states through their marketplace.
- District of Columbia
- New Jersey
- New Mexico
- New York
- Rhode Island
The laws vary considerably from state to state in terms of eligibility criteria. Around 18 states have extended dependent insurance coverage despite student status. In all the remaining states, the federal government is in charge of controlling the eligibility of the applicants.
The majority of states require 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
Employers and insurance providers share the cost of notifying eligible individuals about new enrollment opportunities.
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 for young adults falls on the parents.
Families that qualify for state regulations also share the costs. An eligible young adult cannot be made to pay more for coverage than 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 about 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/