Options for health insurance for children with pre-existing conditions have recently changed – again. The Affordable Care Act (ACA) contained temporary rules for children under the age of 19 and permanent rules that took effect on January 1 of 2014.

These new rules apply to traditional health plans, and traditional healthcare plans leave holes which remain. Supplemental policies continue to fill these holes but are not subject to ACA requirements.

  • Rules for supplemental policies
  • Rules for traditional healthcare plans
  • After age 26
  • Children with Special Needs

Supplemental Insurance for Children with Pre-existing Conditions

There are traditional healthcare plans – those which make benefit payments directly to providers and are designed to protect parents from catastrophic medical expenses. Supplemental health insurance for children with pre-existing conditions works differently. These policies make benefit payments directly to the parents, and make defined payments amount.

These policies are designed to fill holes left by traditional plans: deductibles, copayments, lost income. Because supplemental policies work differently than traditional plans they are not subject to ACA requirements.  But some carriers chose to alter their plans to align with some of the requirements.

Children with Pre-existing Conditions

Most supplemental health insurance will not cover children with preexisting conditions that began prior to coverage. Although the ACA requires traditional plans to cover all preexisting conditions with no waiting period, supplemental policies are not required to do so. Most carriers will continue this practice.

Some policy types will accept children with preexisting conditions by narrowing what is covered or combining a rider.

  • Accident plans are issued without asking medical questions and will cover children for future accidental injuries.
  • Supplemental life insurance is often the only option for many parents to purchase a policy for children with preexisting medical conditions.

Dependents to Age 26

The ACA requires healthcare plans to cover dependents to age 26. Prior to passage of the ACA, most supplemental policies would end coverage for dependents at age 18, or age 22 if enrolled in college or university. Many carriers have chosen to extend the timeframe of dependent coverage to age 26 to mirror the ACA requirement.

That means supplemental health insurance for children with existing conditions can continue on these plans much longer. Only parents who purchased policies while their children were healthy benefit from this extension.

Traditional Insurance for Children with Pre-existing Conditions

The Affordable Care Act requires that health insurance for children with pre-existing conditions. Plans must accept any dependent up to age 26 as a new plan member regardless of any pre-existing health condition. The health plan may not limit benefits surrounding these existing conditions. But there are a variety of options to consider –each with limitations.

Dependents to Age 26

Beginning in January of 2014 all health plans must cover a pre-existing condition, and cover adult children to age twenty-six. Your child is covered even if they are married or single, not living with you, not enrolled in college, not financially dependent on you, and eligible to enroll in their own employer-sponsored plan.

Students are often required to purchase a policy by their college or university unless they can validate coverage under their parent’s plan. This market is evolving rapidly as the new government guidelines roll out. Many colleges are discontinuing these offerings as they do not meet the essential health benefits standards.

Dependents after Age 26

After age twenty-six your disabled adult dependent can no longer continue under the parent’s plan. Your adult dependent can purchase an individual policy with government subsidies through an exchange. As most disabled people have low incomes, the subsidy may cover much of the premium.

Special Needs

While pre-existing conditions can no longer be used to deny coverage, the new law does not guarantee that every treatment for every condition will be eligible for benefits. Check the list of essential health benefits in your state. There are federal guidelines for what should be included, but any state mandate that is more specific may be included. For example, a handful of states have mandates requiring coverage of autism therapies.

The second option is government sponsored Medicaid, which is available to disabled adults over the age of eighteen who are receiving social security supplemental disability income (SSDI).

Children Health Insurance Program (CHIP)

Children’s Health Insurance Program (CHIP) is a federally funded plan that provides free and low-cost coverage for teenagers up to the age of 19. Low-income families with incomes as high as $44,100 per year (for a family of four), may qualify for coverage.

Each state designs own program so plans will vary for factors such as eligibility, premium cost, copayments, deductibles, etc. Contact your state office for more details.

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