Once again, the Supreme Court issued a ruling upholding the constitutionality of the Affordable Care Act. Opponents of the law have made several attempts to legally strike down the Act and each time the Act withstood the challenge. So regardless of whether you are for or against the Act, it is here for the foreseeable future. Also regardless of which way you lean, there is one aspect of the Act that has been met with almost unanimous approval; parents can keep their children on their health insurance policy until they turn 26.
So what happens when that son or daughter of yours turn that new magical age of 26?
If your child is out in the workforce and is covered by insurance through their employer, nothing happens. However if the child is on your health insurance plan, “A Major Life Change” occurs. Depending on the parent’s policy, their insurance will cease immediately, last until the last day of their birthday month, or stop at the end of the year.
If your child is either still in school, searching for their dream job, ineligible for insurance through their current employer, or self-employed, they will need to get coverage through the health insurance market place (www.healthcare.gov). Annually, the health insurance market place has an enrollment period that begins November 1 and runs through January 31st. If enrollment is missed, only those with certain exemptions or “life changing events” can obtain coverage after the enrollment period elapses. Thankfully those about to turn 26 trigger a 120 day special enrollment period. Starting 60 days prior to their birthday and lasting 60 days after their birthday, they can enroll in a plan that will keep them covered.
For those who like to procrastinate, waiting until the child’s birthday or even using the 60 day period after can create a temporary lapse in coverage. When enrolling in a Marketplace plan, you need to enroll before for 15th of the month before the month you need coverage. For example, if you need coverage September 1st, enroll no later than August 15th. Besides the health risk of being uninsured, the government can charge an Individual Shared Responsibly Fee for each month no coverage is in place. Missing this special enrollment period can create an even longer lapse in coverage; you must wait until open enrollment begins in November.
So, review your policy to see when coverage lapses, don’t let your son or daughter procrastinate, and try not to stress over this new “Major Life Change” that the 26th birthday brings about.
John Rosenberger, Tax Manager