Q: The law states we can keep our adult children on our insurance until age 26; however, my insurance company says it doesn’t have to honor that because it’s self-funded. Is that true?
A: No, it's not true.
A plan that is self-funded is one in which the employer pays health care claims on its own, as opposed to buying coverage from an insurance company. These plans are regulated by the Employee Retirement Income Security Act (ERISA), and can be exempt from certain state insurance laws.
But the right to keep your adult child on your insurance plan until age 26 is a federal law that went into effect last year as a result of health reform. Though there will be aspects of the new law with which self-funded plans will not be required to comply, this provision is not one of them. By law, you should be allowed to keep your adult child on your health plan.
Q: My daughter is a college student and she can’t afford the high cost of insurance. Should she just opt out, pay the annual fine, and go uninsured?
A: Right now, there is no fine for going uninsured. The Affordable Care Act does require all U.S. citizens to get health insurance or face a penalty beginning in 2014. However, there will be exemptions for financial hardship.
Your daughter currently has a few options. She might look into a college health insurance plan, if she doesn’t already have one. The quality of these programs varies greatly, however, with many having been found to provide insufficient coverage. Still, it is an option for some coverage if she has none, and worth researching. Just be sure to carefully read the fine print before signing on.
If your daughter is under 26 years of age and you have insurance, you may be able to add her to your health plan. Check with your company’s human resources department, or call your insurance company directly to inquire about adding your daughter if you buy insurance on your own in the private market.
In 2014, when health insurance exchanges go into effect, there will be subsidies available to help families with annual incomes below $88,000 pay for health plans. You can learn how much of a subsidy you’ll be eligible for in 2014, by inputting your financial information into the Kaiser Family Foundation’s health reform subsidy calculator.
And if your daughter’s income doesn’t exceed the federal poverty level ($14,404 for individuals and $29,326 for a family of four), she may qualify for Medicaid benefits.