Adult Child on Your Florida Health Plan: 26 Rule, 30 Option

Under federal rules, a plan that offers coverage for dependent children must make that coverage available until the child reaches age 26. The U.S. Department of Labor says this applies to employer plans and to plans sold in the individual market. A plan is not required to offer dependent coverage at all, but if yours does, the age 26 rule applies.

Florida adds a second layer for some plans. Section 627.6562 of the Florida Statutes requires certain insured employer-sponsored policies to cover dependent children through the end of the calendar year the child turns 25, and to offer the policyholder or certificateholder the option to extend coverage through the end of the calendar year the child turns 30. Since the federal rule already reaches age 26, the Florida age 30 option is the part that goes beyond it.

Short-term plans, fixed indemnity plans, some private plans, and government and church plans may follow different rules. Check your own plan documents for the age limit that applies to you.

For most job-based and individual health plans, your child's age is the main test. According to the Department of Labor, a plan cannot limit a child's eligibility under age 26 because of financial dependency, marital status, school enrollment, residency, or similar factors.

There are limits. A plan does not have to cover your adult child's own children, and the Department of Labor's guidance does not say a plan must cover your child's spouse. The federal requirement ends when your child turns 26, though a plan can choose to keep a child on longer, so ask your plan exactly when coverage ends.

Taxes are a separate question. Whether your child counts as your tax dependent, and how coverage is treated on a tax return, is something to confirm with a tax professional.

Florida's extended dependent rule is in s. 627.6562, Florida Statutes. It requires the insured employer-sponsored policies it covers (the statute also lists blanket and franchise policies) to offer the policyholder the option of covering a child until the end of the calendar year the child turns 30. The word that matters is option. The insurer must offer it, but your employer decides whether to choose it, and the statute does not require an employer to pay for dependent coverage.

The statute also does not limit the insurer's right to underwrite or to charge the appropriate premium for this coverage. So the extra years may come with their own cost, and your plan documents or benefits office can explain who pays.

Not always. Florida insurance law applies to insured plans, where an insurance company or HMO carries the risk. A self-funded employer plan, where the employer pays claims directly, is regulated under federal law and is generally exempt from state insurance regulation, according to the National Association of Insurance Commissioners. The Florida age 30 option therefore does not apply to self-funded plans, though a self-funded plan can still choose to cover older children under its own terms.

The text of s. 627.6562 names employer-sponsored, blanket, and franchise policies. It does not say it applies to individual policies, so if you bought your own plan, ask the insurer what its age limit is. Ask your employer's benefits office one direct question: is our plan fully insured or self-funded?

Start by finding out when your child's coverage would end and how your plan handles it. Then ask what you must do to keep your child on and when you are allowed to make the change.

A child who already has other coverage can fail the Florida age 30 conditions, so check before you add or drop anything. Also remember the statute's re-enrollment limit. If a child was covered under the age 30 option and that coverage ends, the child cannot be covered again under the parent's policy unless the child had creditable coverage with no gap of more than 63 days.

When coverage on your plan ends at 26 or 30, your child has several general paths. The Department of Labor lists coverage under the child's own employer plan and temporary continuation coverage under COBRA among them, and individual coverage is another route.

COBRA is a federal law that lets some people keep employer-sponsored coverage for a limited time after losing eligibility. The Department of Labor says it can last up to 36 months, and notes that COBRA generally applies to employers with 20 or more employees. COBRA has its own notice and election deadlines, so read the notice your plan sends and respond on time. If the employer has fewer than 20 employees and the plan is insured, Florida's Health Insurance Coverage Continuation Act (s. 627.6692) may let your child continue coverage instead, generally for at least 18 months, when the child stops being a dependent under the plan. Ask the insurer how to elect it.

These points are easy to miss.

If you are not sure whether your plan is insured or self-funded, or your child is close to turning 26 or 30, a conversation can help you plan ahead so coverage does not lapse. Prime Health Consultants advisors are licensed and explain options in English and Spanish.

This article is general information and not legal or tax advice. For your plan, the plan documents and the plan administrator have the final word. For insurance problems with an insurer in Florida, the Florida Department of Financial Services consumer helpline is 1-877-MY-FL-CFO (1-877-693-5236).