Keeping Patients When Children Move off of Family Plans

August 11, 2020

Per the Affordable Care Act, insurers phase young adults off their parents’ insurance plans by their mid-20s. Some states offer more flexibility and allow adult children to remain health care dependents until they are 30. As a provider, it is important that you understand your state’s particular rules and have a backup plan in place for when a young patient, inevitably, finds him or herself without coverage.

Age requirements for extended health care coverage

Prior to the passage of the ACA, 37 states had already adopted a policy that granted young adults the option to remain on their parents’ health plans beyond the age of 18. However, to protect those adults living in the 13 other states that have a hard cut-off age of 19, the Obama Administration included a provision within the Affordable Care Act that states a young adult can remain on a parent’s insurance plan until the age of 26. While states can continue with their existing state law requirements for extended coverage, they may not interfere with the application of the ACA.

Per most states’ laws, the cut-off age was 25. Several state laws mandated that individuals be full-time students, unmarried, without dependents of their own, and residents of the state to qualify for benefits. Some went so far as to say that a dependent must reside in the same home as the policyholder. The ACA merely gave young adults in these states a year-longer grace period without severely disrupting insurers’ policies.

In addition to the extra year grace period, the ACA made it easier for young adults to qualify for dependent coverage. Per the law, any person younger than the age of 26 may remain on a parent’s health insurance plan even if the following apply:

  • The dependent starts or leaves school
  • The dependent gets married
  • The dependent is no longer considered a dependent for tax purposes
  • The dependent lives in or out of the family home
  • The dependent has or adopts a child
  • The dependent was offered, but turned down, employer-based coverage

When coverage stops after a person turns 26 depends on the type of plan a parent has. If a parent has a marketplace plan, the dependent may remain on the policy until the end of the year he or she turns 26. The child must use the open enrollment or special enrollment period (whichever comes first) to apply for individual coverage. If a parent has a job-based plan, the dependent’s coverage ends at the end of his or her birthday month.

States with extended coverage

Several states grant young adults even more leeway by allowing extended dependent coverage up until the age of 30. For instance, Florida allows young, unmarried individuals who do not have dependents of their own to remain on their parents’ plans until the age of 30. In Illinois, parents of dependents who are also veterans may do the same. Other states that extend dependent coverage beyond age 26 include Wisconsin (27), South Dakota (29), New York (30), Pennsylvania (30) and New Jersey (31). These states generally require an adult child to remain unmarried and dependent-free to qualify for extended coverage.

Special enrollment periods

As a health care provider, you have a responsibility to your patients to advise them on what they can do to improve their health and quality of life. Part of doing both involves ensuring patients have adequate coverage. If you learn that a patient is about to be phased off a parent’s insurance plan, encourage them to conduct research early on, as they have limited time to enroll in a new plan.

Patients whose parents have marketplace coverage have a 120-day window to apply for coverage. This special enrollment window begins 60 days before one’s 26th birthday and ends 60 days afterward.

The special enrollment period for individuals whose parents have employer-based coverage is slightly shorter. It begins 60 days before a person’s 26th birthday but ends only 30 days after the big day. Individuals who miss the special enrollment period must wait for open enrollment, which begins November 1st and ends December 15th. (California’s open enrollment period is slightly longer, beginning on October 15th and ending January 31st.)

Coverage options beyond 26

Most people are partial to their doctors or dentists and will do what is necessary to remain a patient. However, because cost is almost always a factor, you may lose a young patient who cannot afford your services to a cheaper competitor or clinic. You can take steps to prevent this from happening by informing patients of affordable coverage alternatives. Some options to discuss with young adults are as follows.

Shop through the exchange

The health care exchange is a young person’s best bet for finding affordable coverage. Advise patients that if their income is between 100% and 400% of the federal poverty line, they may qualify for tax credits to help subsidize the cost of health care coverage.

Find coverage through school or an employer

Many universities offer affordable coverage to students. If a patient is not a student, encourage him or her to ask about job-based coverage.

Apply for Medicaid or CHIP

Medicaid is low- to no-cost health insurance available to individuals whose incomes fall below 138% of the federal poverty line. CHIP is a low-cost option for pregnant women.

Look into COBRA

COBRA allows a young adult to stay on their parent’s plan for up to 18 months after their 26th birthday. However, the policyholders must assume the cost of coverage, which can get expensive.

Check out catastrophic plans

Catastrophic plans are only available to people under 30. These plans come with high deductibles and assume the holder will not be using the benefits much, if at all. However, premiums are low, averaging about $173 per month.

We can help you retain patients

Doctor Genius is #1 in new patient acquisition, and we are not too bad at patient retention, either. While cost will always be a factor for your patients, whether they continue to partner with you ultimately comes down to your level of care and ability to maintain trusting relationships with them. We will leave the care to you, but when it comes to building and maintaining relationships, we are happy to help. Call us by phone to discuss ways we can assist you.

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