Texas Health Insurance for Kids Turning 26 and Losing Coverage
It can be a bit stressful when you get the notice by mail.
Your children are turning 26 and will get kicked off your plan at such-and-such date!
Great. Now what?
Depending on how you file taxes, there are two ways to go and we can guide you through the whole process in Texas!
First our credentials:
This is what we'll cover:
- Why is my 26 year old getting canceled off my health plan?
- The tax filing question guides how to proceed
- Comparing plans, networks, and rates for 26 year olds aging off
- How to quote and enroll for child only policies
Let's get started. Reach out with any questions at zero cost to you:
Why is my 26 year old getting canceled off my health plan?
It was actually an expansion in the original 2014 law. It used to be that a child would "age off" the family policy after 18 unless they were full-time students and even then, it wasn't till 26.
Since the ACA law (Obamacare, exchange, etc.), a dependent child can remain on the family plan till age 26.
When the 26th birthday comes around, the carrier will automatically drop the dependent 26 year old from the policy generally on the 1st of the month following the 26th birthday.
So...if your child turns 26 on May 15th, the coverage should go through the end of May and we'll need to find other options for June 1st.
The new plan will need to be enrolled and process BEFORE June 1st to get that effective date so don't delay!
There are two different ways to go depending on the type of plan they are being canceled off of:
- Employer plans may have a Cobra option available for the 26-year-old
- Individual/Family plans including Obamacare will require a new enrollment
A few notes on both.
If Cobra is available for an employer plan, you will have 60 days to elect it after the last day of group coverage for the 26-year-old. Make sure to go according to the letter you receive.
We have a big review on Cobra versus Obamacare in Texas.
Cobra is a continuation of the same group plan but you're paying full pop now. It can be expensive which brings us to the second option.
You can also enroll in an exchange plan within 60 days for the 26-year-old as well.
One note...with Cobra, we can elect it and the effective date will go back to the last day of group coverage
With Obamacare, we have to enroll PRIOR to the 1st of the month the plan will start
Loss of coverage is a special enrollment trigger that allows us to enroll outside open enrollment as long as we do it within 60 days of the loss of coverage!
Okay...those are basic mechanics and if this is all terribly confusing, reach out to us!
Let's now look at the exchange or Obamacare side of things. It gets a little more confusing. Taxes confusing!
The tax filing question guides how to proceed
The big deal these days with Texas individual family plans is the subsidy which can bring down the cost significantly.
The issue for 26 years old aging off family plans has to do with the definition of "household" in the exchange.
- Household is everyone that files together on a 1040 tax form, even if not enrolling
This is a separate rule from the 26-year-old age-off one!
- If you are going to claim the 26-year-old on your taxes for this year (next April filing), then we would look at the family's income to see if they're eligible for a subsidy EVEN if the other family members are not enrolling.
- If the 26-year-old is filing their own taxes and you're not claiming as a dependent, we set up an account with just them.
So many people mess this up since it's very confusing and in flux. Reach out to us and with 5 minutes of questions, we'll get to the bottom of it.
There's zero cost for our assistance as Texas health agents!
Big review on how to get the most out of the Texas health subsidy. Also, what if your 26-year-old doesn't have income? Reach out to us. We'll go through the options.
Okay...so what plans for your 26-year-old?
Comparing plans, networks, and rates for 26 year olds aging off
When a 26-year-old "ages off" the family plan, it's a qualifying event that allows them to enroll in their own plan. Any plan that's available on the market!
Sure, they can get the same plan the family had if coming from on or off exchange options.
It makes sense though to re-evaluate the options especially if subsidies are in place or they're eligible for the silver 87 or 94 plans.
Learn how to compare the Obamacare Texas plans or how to compare the Texas health networks.
We can actually make decisions for just that 26-year-old now instead of the whole family!
Here's the general layout of the plans:
As for carriers, we have full choice here now with the following dominating the individual/family market:
- BCBS of Texas - roughly half the market
- United health - coming on strong in certain areas
- Ambetter - offering EPO network plans with more flexibility
It really comes down to pricing and networks now. We have a big review on the Texas Obamacare networks but our quote system will let you put in your doctors so you can see what plans work with them!
Speaking of which.
How to quote and enroll for child only policies
You can run a free quote for your 26-year-old here:
Make sure to enter your income depending on who claims the 26-year-old (family or self). It's the AGI on the 1040 tax form.
If this income is below a certain level (see Texas income chart here), they may not have a subsidy.
Reach out to us in this case so we can really fine-tune the income piece where many people make mistakes.
Again, it all gets pretty confusing with the ACA law around young dependents like a 26-year-old so let us help you. Too many moving pieces.
We get a few of these each week so we've seen it all!