Obamacare: How Health Reform Affects Your Kids' Coverage

affordable healthcare sign

The Affordable Care Act (ACA) went into effect on October 1, 2013. On March 31, 2014, open enrollment ended and all Americans must be registered with an ACA-compliant health insurance plan (those who truly cannot afford coverage can apply for an exemption; changes to coverage can be made at major life events).

The ACA is a complicated piece of legislation. What does the ACA mean for your children and their health coverage? If your family, you, or your child currently have no insurance due to being "uninsurable" or because of high costs due to pre-existing conditions, you will now be able to get affordable coverage, and rebates are available in some cases. Even if you already have a good insurance plan, you and your children may face some changes in coverage due to the ACA, both good and bad. These changes may affect your or your young adult child's future life decisions, so it is good to be aware of changes or limits in coverage to existing plans.

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Changes or Limits in Existing and Grandfathered Plans

What are "grandfathered" plans? They are the exception; they do not need to offer all of the same new benefits as other plans. These plans existed in March 2010 and have not changed in substantial ways. Grandfathered plans can be employer-based (HMO or PPO) or individual (IMO), and do not have to cover preventative care at no charge, protect your choice of doctors, offer coverage to adult children 19-26 who are eligible for their own workplace plan, or follow other new guidelines on rating and appeal. In addition, individual grandfathered plans are not required to eliminate yearly coverage limits or follow the new guidelines on pre-existing conditions. You can contact your current plan administrators to find out if your existing plan is grandfathered. If your plan is not required to follow, and does not follow new ACA directives that are important to your family, you can now shop around for a plan that is a better fit.

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Some of the new ACA-compliant rules now governing non-grandfathered insurance plans include:

  • The pre-existing conditions of children under age 19 can no longer be used to refuse coverage or to charge higher rates. This is true for Medicaid and CHIP plans as well as employer-based and individual plans.

  • All plans can no longer drop members who become sick or injured after obtaining coverage; nor can they cancel plans due to honest mistakes made in filling out application forms.

  • Preventative care must be covered with no co-pay or requirement to meet a deductible.

  • All plans must end lifetime limits on coverage.

  • Children can join or remain on their parents' health insurance plan until age 26. It does not matter if they are married or not married, living with you, in school, financially independent, or eligible for their own employer's plan.

  • Subsidies are available for those who do not quite qualify for Medicaid or CHIP and have no qualified options through their employer.

Go to healthcare.gov for additional information. How you research for and enroll in ACA-compliant coverage depends on which state you live in. Additional contact information is available at: www.hhs.gov, or www.kff.org/interactive/subsidy-calculator.