May I Move My Son From My Insurance Plan To A Better Option On The Marketplace?

[Duaine]

Some readers want to figure out how to become eligible for coverage on the health insurance marketplaces, while others want to figure out how to avoid it. This week I answered questions from both.

I am covered by my employer’s health plan, but I’m not happy with it. My son is 21 and currently covered under my plan. While I realize that I am not eligible for Obamacare, I am curious if I can terminate my son’s policy so that he might be eligible.

Since the open enrollment period to sign up for coverage on the state marketplaces ended Feb. 15, in general people can’t enroll in a marketplace plan until next year’s open enrollment period rolls around.

If you drop your son from your employer plan, however, his loss of coverage could trigger a special enrollment period that allows him to sign up for a marketplace plan. Whether he’s entitled to a special enrollment period depends on whether his loss of coverage is considered voluntary, say officials at the Centers for Medicare & Medicaid Services. In general, voluntarily dropping employer-sponsored coverage doesn’t trigger a special enrollment period for individuals or their family members. But if you drop your son’s coverage on his behalf without his consent, his loss of coverage wouldn’t be considered voluntary and your son could qualify, according to CMS.


Whether he’ll be eligible for premium tax credits to make marketplace coverage more affordable is another matter, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

If you claim him as your dependent, he generally won’t be eligible. If you don’t claim him as your dependent, he would have to qualify for subsidies based on his own income.

http://www.insurance-forums.net/forum/newthread.php?do=newthread&f=43

 

[AllenChicago]

I thought one family member triggering a SEP created a SEP for the entire family. At any rate, this is good information Duane. Thank-you.

 

[RayNY]

Can we please get that CMS ruling that's cited in this article?

It's my understanding that "involuntary" means "not from the policyholder", and clearly this is a case of the policyholder making a change. Whether or not the dependent consents is irrelevant, they can't make a change anyway.

If this claim is true, anyone with more than one person on a contract can just drop coverage, claim an SEP on the other person, and all can re-apply since the SEP applies to the household. That's a pretty huge loophole.

 

[rzzr]

Defining voluntary/involuntary loss of coverage is best done by understanding the insured premium paying ability. RayNY you have the right idea with your association of involuntary-not from policy holder. With this said, Duaine I believe you need to reevaluate your reader's situation.

Depending on how old the son is, I would suggest best way to go about this would be looking into the dependency status and the son-parent relationship from a tax filing POV. As it stand now, it looks like the parent claims the son as a dependent, or at least he did for 2014. Now if the son plans to file for 2015 as single this would change his dependency relationship with his parent, that is the parent loses a dependent, which is a QLE enabling a SEP both for the parent and son. A good indicator to help answer the "Is this worth it" question would be to look towards the son's income and evaluate his eligibility for a tax credit, perhaps as well as the parents.

Hope this helps!