Readers Ask: Who Is Responsible For An Adult Child's Coverage? Must Insurers Notify Smokers Of Ways To Lower Premiums?

Apr 22, 2014

The open enrollment season has ended, but readers continue to have questions about coverage under the health law.

Q. Do we have to carry our 24-year-old daughter on our health insurance policy? She is employed and has two degrees. We informed her that we would be dropping her at the end of the year because it's costing us a fortune, and she told us today that we are required by law to cover her. We do not claim her on our taxes.

A. It’s your decision whether to keep your daughter on your plan. Under the health law, insurers are required to make coverage available to dependent children until age 26, “but it’s up to the policyholder if they want to cover her,” says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities. Since you no longer claim your daughter on your taxes, you won’t be responsible for paying the penalty if she doesn’t have coverage.

Q. My wife and I are both over 65 and on Medicare. We have custody of a 6-year-old child who is on Medicaid. We live in Indiana and claim him on our federal and state taxes. The state is reviewing our grandchild’s Medicaid status, and we would like to know whether our income is included in the Medicaid eligibility decision.

A. If you have custody of your grandson, but have not adopted him, the state would not consider your income in determining whether he’s eligible for Medicaid or the Children’s Health Insurance Program (CHIP). Only the child’s income and any income from his parents or siblings living with him are relevant. But it doesn’t sound as if the child’s parents are also living with him, so it would likely be the child alone.

However, if you have adopted the child – and he was not in foster care -- and you claim him on your taxes, the state will probably consider your income in determining whether he’s eligible for Medicaid or the Children’s Health Insurance Program (CHIP). 

If he’s no longer eligible, you could enroll your grandson in a child-only plan on the health insurance marketplace.

"A Medicaid denial creates a special enrollment opportunity, and the child could be newly eligible for premium tax credits on the marketplace," says Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service.

Q. Do employers and insurers that charge employees extra for tobacco use in small group health plans have any responsibility to inform employees directly that they can avoid the premium surcharge by enrolling in a smoking cessation program?

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A. Yes, under the health law both insurers and employers are required to tell workers in small group health plans what they can do to avoid paying a higher premium for smoking, such as participating in a smoking cessation program, says Kirsten Sloan, senior policy director at the American Cancer Society’s Cancer Action Network.

Further, the rules prohibit insurers in the small group market from imposing a tobacco surcharge unless they also offer a wellness program that eliminates the surcharge if workers participate in stop-smoking programs.

Under the health law, insurers that sell plans in the individual and small group markets can no longer turn people down or charge them more because they have pre-existing medical conditions. However, the law allows insurers to vary premiums based on four factors: whether people smoke, their age, family size and where they live.

Smokers can be charged 50 percent more than non-smokers under the law. But a number of states have prohibited insurers from imposing higher premiums on smokers, arguing that by making coverage less affordable it reduces the chance that smokers will participate in programs to quit smoking.

In addition, the health law requires that methods approved by the Food and Drug Administration to quit smoking be covered without any out-of-pocket costs to individuals in non-grandfathered plans. But a study commissioned by the Campaign for Tobacco-Free Kids found that coverage varies widely by plan.

“We have urged HHS to provide further clarification to insurers about the scope of tobacco cessation services they must provide,” says Brian Hickey, the group’s director of federal government relations.

CLARIFICATION: This story was updated April 23 to add information about Medicaid eligibility for the child being cared for by his grandparents. The earlier answer assumed that the grandparents had adopted the child and therefore their income could be relevant to the child's eligibility. But new details were added to explain that if they have not adopted the boy but have custody, their income is not part of the determination. Also, if the grandparents adopted the child from foster care or took on guardianship from foster care, the grandson could in some circumstances be eligible for Medicaid regardless of their income.

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