Keeping adult kids on your health insurance

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Q. My husband is getting ready to retire, and he can keep our health benefits through the company. Right now we are covering two adult children, ages 22 and 24. They are both full-time students who work part-time. How can we calculate if it be more economical to help them get their own health policies and capitalize on tax credits?
— Mom

A. There are a lot of variables here, but here’s what you should consider.

First, though, you’re very lucky that your company will allow you to maintain your health benefits upon retirement.

“Chances are you’ll have a richer plan with a broader network through a company sponsored plan than you can get elsewhere,” said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock. “With the escalating cost of coverage these days, many companies are getting away from offering benefits to retirees.”

Gaelick says you should start by verifying the benefits in retirement will be the same as you have now, and confirm who is responsible for the premiums.

As for your children, according to Obamacare rules — which as of today are still in effect — your children can remain on your plan as eligible dependents until they turn 26, Gaelick said.

“Some insurance carriers cover children to their actual birthday, others to the end of the month they turn 26, others possibly to the end of the calendar year they turn 26,” he said. “Best to confirm which applies in your case.”

On the economics of the choice, Gaelick said, if your company will pay the premiums until the kids are no longer considered eligible, he recommends you leave them on for now and look at other options when they lose coverage at age 26.

“According to the rules today, this would be considered an `involuntary’ loss of coverage, triggering a `special open enrollment’ so they can get other coverage immediately or possibly continue the same coverage at their cost under COBRA,” he said.

Rates will change so from a premium standpoint, you’d need to compare at the appropriate time, he said.

In terms of tax credits or subsidies, or even an Obamacare Marketplace, the future is unclear.

“Planning to capitalize on tax credits today may backfire,” Gaelick said. “I do suggest you consult with a knowledgeable broker as well as your accountant before committing one way or another.”

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This story was first published in May 2017. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.