Consumer Alert: Insuring adult children (ages 19-26)

Originally Published January 2011:

As pieces of the Patient Protection and Affordable Care Act go into effect, UP will continue to explain new options and rules.   One of PPACA’s first benefits is better access to coverage for children and young adults (19-26 years old), also known as “adult children”. We explained this in “You can go home again…at least for health insurance” our June 2010 Tip of the Month. The following information goes into more specifics, including options for insuring “adult children” with pre-existing conditions:

Children ages 0-19

Parents now have the absolute right to add their children ages 0-19 on to their health insurance plans, regardless of whether or not it is a group or individual policy and regardless of whether the child has a pre-existing condition.

Adult Children ages 19-26

In today’s economy, many “adult children” need their parents’ help to stay insured. As of September 23, 2010 parents have the right to add children under the age of 26 back onto their health insurance plans. This is true regardless of the child’s residence, marital or educational status. Be aware: an adult child can only be added during the open enrollment period or when your policy is up for renewal. You need to notify your insurance carrier that you are adding dependents and be prepared to pay an increased premium. But unlike in the case of children ages 0-19, insurers can refuse to add an adult child ages 19-26 with a pre-existing condition onto their parents’ individual plan.

Pre-Existing Conditions

The solution for adult children 19-26 with pre-existing conditions whose parents have an individual (not group) insurance plan lies in another important benefit of health care reform that took effect last year. Every state must now offer a Pre-Existing Condition Plan (PCIP).

If you are or have an adult child that is one of the 129 million Americans that an insurer might classify as having a pre-existing condition, you can find out about your state’s Plan by clicking on the map provided here. To qualify for a PCIP you must have been denied coverage and be uninsured for at least six months. PCI plans cover health benefits, including hospital care and prescription drugs. Premiums are based on age, not condition and eligibility is not income based. Your state may already have been offering a plan for people with pre-existing conditions and if you’re enrolled in that plan you will not be eligible for the newly created PCIP because of the 6 months “bare” requirement. Learn more about your health care insurance options on the HHS website.

Recap:

• Children ages 0-19 now have the absolute right to be added to their parents individual or group health insurance plan during open enrollment or at the time of renewal.
• Adult children ages 0-26 can now re-enroll in their parent’s insurance plan during the open enrollment period (group plans) or when the policy comes up for renewal, (individual plans).
• Adults and adult children 19-26 with pre-existing conditions can apply to their state’s PCIP if they’ve been uninsured for 6 months or more.
• Starting in 2014 insurers will no longer be able to reject applicants due to pre-existing conditions.

* If you live in California, you should know about the new state law (AB2244) that lets parents select health insuranc policies for their children, even if they have pre-existing conditions. To read more, click here.

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United Policyholders thanks and acknowledges Susan Shargel, CLU ChFC,  Shargel & Co Insurance Services, S.F. and Larry Ginsburg, CFP, Ginsburg Financial Advisors, Montclair, CA. for assistance with this Consumer Alert.  Research and writing by UP Staff; Amy Bach and Paige Labourdette.