What Is the Age Cutoff for Keeping a Child on a Parent’s Health Insurance Plan?

During the past decade, the healthcare industry has been wracked by momentous amounts of change. In addition to a long-term secular trend that has seen high-cost specialists take on more and more of the responsibilities formerly reserved for primary-care physicians, the cost of many healthcare services has jumped by 5 to 10 percent per year. Although it remains unclear whether this so-called "healthcare inflation" is justified or sustainable, it has undoubtedly affected many of the products and services that ordinary Americans use on a regular basis. Chief among these is health insurance. In fact, the health insurance industry of the 2010s looks starkly different from the health insurance industry of the 2000s.

Many of these changes can be traced to the passage of the Affordable Care Act. Among the law's provisions was a relatively popular requirement that American health insurance providers extend coverage to their existing policyholders' dependent and non-dependent children for a fixed period of time. The law established this fixed period as the first 25 years of the applicable children's lives. While parents and children are under no obligation to take advantage of this provision, health insurance companies must honor their requests to be linked by the same policy. Once a child turns 26, any company that provides him or her with insurance coverage under a "parent plan" may choose to cancel this coverage without explanation.

Certain states maintain higher age cutoffs for this "parent plan" mandate. In some places, the cutoff may be as high as 30 years of age. In addition, some states may compel insurance companies to offer joint coverage for developmentally-disabled adult children and their parents for longer than is required for younger members of the general population. This can dramatically reduce premium and out-of-pocket expenses for the parents of disabled individuals.

It's important to note that these new federal provisions cover young-adult children regardless of their earning power or dependent status. Successful adult children who earn large sums of money can still qualify for inclusion on their parents' insurance plans.

Under the new law, parents have a wide range of insurance options for these children. Whereas most parents choose to attach their children to their existing employer-sponsored group coverage plan, others may opt to purchase a "family" plan that includes multiple children. In some cases, group health plans will permit adult children who exceed the age cutoff to remain on their parents' plans.

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