Dependents Turning 26 - PPACA

When Coverage Ends for an Adult Dependent
The adult dependent coverage portion of the Affordable Care Act was enacted in September of 2010. The provisions of the ACA were that adult dependents should remain covered on any eligible group health plan until the age of 26. ​

Coverage for dependents is carried either through the date the dependent turns age 26, literally on their 26th birthday, or until the end of the month during which the dependent turns 26. The determination to carry dependents until the end of the month is made by the plan itself so this will depend on the coverage plan. Some insurance carriers practice ending coverage on the date of birth, while others end dependent coverage at the end of the month. Either options are acceptable across the United States long as the plan rules are honored and every member is treated consistently the same.

Coverage for dependents is carried either through the date the dependent turns age 26, literally on their 26th birthday, or until the end of the month during which the dependent turns 26. The determination to carry dependents until the end of the month is made by the plan itself so this will depend on the coverage plan. Some insurance carriers practice ending coverage on the date of birth, while others end dependent coverage at the end of the month. Either options are acceptable across the United States long as the plan rules are honored and every member is treated consistently the same.

Exception to the Rule
The provision regarding grandfathered plans not having to cover adult dependents until 2014, was the exception prior to 2014. For plans signed before January 1, 2014, grandfathered group health plans were able to exclude an adult child if the adult child was eligible to enroll in an employer-sponsored health plan other than their parent’s. Beginning in 2014, grandfathered group plans were required to comply with the requirement and children up to age 26 can stay on their parents’ group health plan, even if they have other employer-sponsored coverage's available.

Dependent Coverage for Adults Now
The ACA rules still apply today to dependents under the age of 26. When a dependent turns 26, which is seen as a qualifying event for full benefits, this produces a loss of coverage for that person. When this happens, groups complying with Federal COBRA should offer COBRA to that over-age dependent when this event occurs. Alternatives for coverage are now available with the development of the Market Open Enrollment Insurance Exchanges over the past two several years. 

To better explain what a qualifying event looks like for losing dependent coverage, below is a list of general rights of over-age dependents losing coverage as follows:

Under-26 coverage ends on a child’s 26th birthday – what rights they still have:

• When a child loses coverage on their 26th birthday, they qualify for a Special Enrollment Period. This lets them enroll in a health plan outside Open Enrollment. 
• They may qualify for premium tax credits and other savings based on their income.​
• Their Special Enrollment Period ends 60 days after their birthday.
• If they enroll before their 26th birthday, coverage can start as soon the first day of the month they lose coverage. If they enroll during the 60 days after their birthday, coverage can start the first day of the month after they pick a plan.
• If they don’t enroll in health coverage within 60 days of their birthday, they may not be able to get coverage until the next Open Enrollment period.
• If they aren’t insured, they may have to pay a fee for being uninsured. If they’re uncovered for less than 3 months of the calendar year, they don’t have to pay the fee.

Just because covered dependents on your plan turn 26 years old, doesn’t mean they can’t still receive full insurance benefits coverage. There are alternative options, and Employers should carefully audit and report over-age dependents for COBRA eligibility. Contact our professional COBRA benefits solutions company today with questions regarding dependent coverage rights. Don’t wait until the day after their 26th birthday, call us today! ​