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Reinstating adult children on parents' health-care policies

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By Kimberly Lankford
Sunday, May 2, 2010

Q: Are the companies that say they will extend coverage to recent grads before the new health-care reform law takes effect also reinstating kids who are too old to be on their parents' health-insurance policies?

A: Generally, early implementation of the new rule applies only to children who would otherwise be dropped from their parents' policies before the new law kicks in. To qualify for this early effective date (June 1 for many of the companies), children must be currently covered under their parents' policies; adult children who have "aged out" and want to get back on must wait until the new plan year that starts after Sept. 23 (for many, that means Jan. 1, because the plans operate on a calendar-year basis). Contact your firm's HR department or the insurer for details.

My daughter is 24 and works part time with no benefits. Will she be able to get back on my policy? I don't claim her as a dependent on my taxes.

She'll probably be able to get back on your policy once the law takes effect. The rules are quite broad: "Adult children do not have to be dependents of the parents for tax purposes, they don't have to be living at home, they don't have to be full-time or part-time students, and they may be married," says Randall Abbott, senior consultant with Towers Watson, a global benefits-consulting firm. But children who have the option to sign up for health coverage through their employer cannot qualify to remain on your policy.

Regulations should be issued soon with more details about who qualifies and on the procedures for reinstating children who have been dropped from their parents' coverage.

-- Kiplinger's Personal Finance


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