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April 01, 2010 at 08:00 PM
The situation: We received a call last week from a client whose daughter recently told him she hates her insurance “because it does not cover anything.” He phoned me to see if she had a real gripe, and if I could help him find another policy with better coverage for her.
The problem: It turned out that her policy had a $5,000 deductible, which did not include coverage for dental or vision doctor visits. Since she has an entry-level position and not a lot of extra spending money, I told her she had a choice.
She could choose to pay more per month to lower her out-of-pocket expenses, but her monthly premiums would be higher. Since her father was paying her premium, and was happy to do so, we decided the best policy for her was one with a higher premium and lower expenses.
The solution: The decision to pay for an adult child’s health care is a personal one that each family must make. The reality is that once a child turns the age selected on the policy by the plan administrator based on the rules of the state and the size of the employer, they are no longer considered a dependent.
In many cases, the age limit is 25, but it can be 19 or the time at which the child graduates from college. Many times, the insurance company does not notify the parent or the plan administrator that the student has been dropped. The student typically finds out when filling a prescription or when receiving services.
Although there is now a federal mandate in place to allow children to be included on their parent’s health plan until 26 years of age, it still may be less expensive to insure that child on their own policy themselves rather than remain on the parent’s plan. Obviously, the rates will be much lower for someone who is much younger.
