Who Qualifies As a Dependent for Health Insurance?

Health care coverage is one of the most debated issues in America. The rising cost of health care insurance often makes it difficult for young people just out of college to secure health insurance and pay for living expenses while searching for a job or starting a lower paying job. The Affordable Health Care Act passed March 23, 2010 helped close that gap in the system.

History

• Before the Affordable Health Care Act, the age of dependents varied from state to state. States, historically, have control over their insurance rules and regulations and each has its own Department of Insurance. According to the Kaiser Family Foundation "Definition of Dependency by Age, 2010," some states had no specific age or marital status requirement for dependency and others were as low as 19 and unmarried or as high as 30 and unmarried.

Types

• While the coverage varies by company and policy, traditionally health coverage dependents are spouses and children. The dependent must be a stepchild, natural child, adoptive child or under legal guardianship of the adult. Some plans cover disabled children. The new age limit for dependent children throughout the nation is 26.

Geography

• Where the dependent lived was important at one time. Because of the passage of Affordable Health Care Act, insurers no longer can limit dependency to children living with their parents.

Features

• The Affordable Health Care Act does not require dependent children to be financially dependent on their parents to be guaranteed coverage, as long as they are under the age of 26. Even married children with children are eligible dependents, but their spouse and children are not. The child doesn't have to be in school to qualify.

Benefits

• The new law excludes the cost of covering dependents from the income of the employee covering them. By increasing the age of coverage, the new law plugs the gap in coverage for a large segment of society.

Time Frame

• Open enrollments for coverage for 26 or under dependents began on September 23, 2010. After that date, parents simply need to sign up their children for the option. Many companies began offering insurance to the group even before that date. You'll find the list at the United States Department of Labor website.

Exception

• If the child is eligible for employer-sponsored plans elsewhere, the insurance company doesn't have to cover him if the eligibility was in existence before March 23, 2010. This exception disappears after January 1, 2014 when the new plan year begins.