We put our 24-year-old son back on our health insurance
policy at the beginning of the year, but he just landed a new job
with benefits. The health insurance at his company isn't nearly
as good as our policy, though. Can we keep him on our policy, or
does he have to take his employer's insurance?
That's a tricky question. The health-reform law allows parents
to keep their grown kids on their health insurance coverage until
age 26. But the rules are complicated if the child's new employer
offers health insurance benefits (regardless of whether he or she
signs up for the employer's plan).
The answer depends on whether the parents' health plan is
considered to be "grandfathered," meaning it has remained
essentially the same since health care reform was enacted on March
23, 2010, or "nongrandfathered," meaning it's either a new plan or
an existing plan that's made significant changes to its premiums
and benefits since then. Plans that are not grandfathered are
subject to some additional provisions of the new law that do not
affect grandfathered plans.
Your son can stay on your policy if it is not grandfathered even
if he is offered health insurance coverage at his new job. But if
your plan is grandfathered, then it's up to your employer to decide
how to apply this rule. Some employers will allow adult children to
stay on their parents' policies even if they are eligible for
health insurance coverage through their jobs. But other employers
with grandfathered plans will choose not to extend coverage to
adult children who are eligible for their own insurance through a
job. "How 'good' the coverage is, or even whether the child takes
that other coverage, is not relevant," says Pearce Weaver, senior
vice-president of Fidelity Benefits Consulting.
These rules, however, can be difficult to enforce. "Some
employers conduct dependent audits to confirm eligibility of
covered dependents, including the child's employment" says Weaver.
"And many employers reserve the right to take disciplinary action
against employees who fraudulently cover ineligible dependents," he
Ask your employer or insurer whether your plan is considered to
be grandfathered and find out about the rules for keeping your son
on your policy. Beginning in 2014, new rules kick in that will
allow adult children to stay on their parents' plans even if they
are offered coverage through their employer.
For more information about the nuances of this rule, see the
Young Adult Coverage Until Age 26 section of the
Healthcare.gov Web site
6 Ways to Cash In on the Health Law
for strategies to make the most of the new rules.