The COBRA Blog

What Happens When Your Employee’s Dependent Turns 26?

Posted by Robert Meyers on Fri, Jun 27, 2014 @ 19:06 PM

Age-26-RuleAs an employer, you face tough questions from employees every day – particularly now as you both navigate the changing landscape of health care reform. If the “age 26” question hasn’t come up yet, you’ll likely encounter it soon. To help you be prepared, we’ve prepared the hypothetical scenario below.

The hypothetical question posed by employee, John Jones:

My daughter is about to turn 26 this summer. I suspect that after her birthday, she will no longer eligible for my health insurance, but I’m not sure. I’m also not sure what her options are since the next federal Marketplace enrollment isn’t until the fall. What can you tell me?

How would you answer? 

  • Answer One: “It’s okay. Your plan continues providing dependent coverage through the end of the plan year.” 
  • The Background: This is true of some plans. Other plans terminate coverage for dependents immediately on their 26th birthday or on the last day of the month in which he or she turns 26. Take the initiative to find out how long, under the benefits package you offer, your employee’s daughter will retain coverage after turning 26.
  • Answer Two: “When your daughter turns 26 and loses dependent status, the good news is, she becomes eligible for COBRA.” 
  • The Background: There are a variety of “triggering” life events which make a person eligible for COBRA coverage – see the full list here. With COBRA, your employee’s daughter can keep the same benefits she has now for an additional 18 months. That said, she will be responsible to pay the full cost of coverage.
  • Answer Three: “Her coverage will end on her birthday, but don’t worry. This is considered a qualifying life event for Marketplace Special Enrollment.” 
  • The Background: As we mentioned earlier this year, “all of the qualifying events associated with COBRA are now also considered triggering life events under PPACA and cause special Marketplace enrollment to be available when they occur.” This means your employee’s 26-year-old can apply for her own health insurance plan through ACA special enrollment as soon as she loses her dependent status. Go here to start that process.
  • Answer Four: “Is it possible for her to get benefits through her employer?” 
  • The Background: Your employee’s daughter may be able to get health benefits through her own place of employment, if benefits are offered and she satisfies the plan eligibility requirements. Because she was covered under your plan and is now losing coverage, she qualifies for a special enrollment period under her employer’s plan.

So as you can see, there are several correct answers to your employee’s dilemma. As always, be proactive, educate your team about their options, and do your part to provide the information they need to make smart choices.

Also, don’t forget to subscribe to the COBRA blog in the top right corner of this screen.

Tags: cobra blog, COBRA eligibility at age 26, COBRA questions, age 26 rule

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