One of the biggest changes wrought by the new Affordable Care Act is the new-found ability of parents to include their adult children on their healthcare plans. While most consumers are aware of this new rule, it remains shrouded in uncertainty. Many folks are unsure whether the rule applies to all individuals under the age of 26 or merely financially-dependent adult children who are still being claimed as such on their parents' tax returns. In fact, many financially-independent adult children without access to affordable health care of their own are waiving their right to coverage because they assume that the new law does not apply to them.
This course of action is not advisable. In most circumstances, the new federal law requires health insurance providers to provide coverage for any child under the age of 26 provided that a parent attaches him or her to an existing health insurance plan. This is true for group coverage plans as well as independently-purchased single-coverage plans. After 2014, insurance companies will be required to provide coverage under this rule to virtually any young adult who requests it. They will no longer be able to deny coverage to children with pre-existing health conditions.
This new rule is not designed to provide young adults with a "free ride" on their health insurance coverage: These dependent children must pay the full cost of coverage on their parents' plans. If they can't afford to do so, their parents must pick up the cost of coverage.
A "grandfather" clause in the Affordable Care Act creates a notable exception to this rule. Group insurance plans that existed before March of 2010 and have not been updated to reflect the Affordable Care Act's changes may be exempt from the law's new dependent-child coverage rule. Parents who have belonged to one of these group plans for years may not be able to use them to cover their adult children.
However, insurance companies may claim this exemption only when the dependent child in question demonstrates an ability to find group health insurance elsewhere. In other words, he or she must be able to secure insurance through his or her employer or educational institution. If the child lacks access to other forms of group insurance and would be forced to purchase expensive single-coverage insurance, the grandfathered plan must agree to cover him or her. Failure to do so would represent a breach of law on the part of the grandfathered insurer.