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What Are the Health Insurance Options for Your Kids?
Every parent wants to be able to provide their children with the healthcare coverage they need, whether for routine check-ups and vaccinations or for an accident or an unexpected illness. Ideally, that means having a health insurance plan that covers both expected and unexpected medical needs.
Some states and the District of Columbia require that every resident — including children — has healthcare coverage. Check with your state to see if this applies to you.
This article covers many of the ways to get health insurance for kids.
What You Need to Know:
In general, work-based health insurance and plans you buy on the federal or state Health Insurance Marketplace cover children until the age of 26.
Options for standalone insurance coverage for children vary widely in price and the benefits they provide.
Finding the right plan for your child requires a careful balance of cost and benefits as well as checking the insurance company’s reputation and practices.
Some states and the District of Columbia require that every resident — including children — has healthcare coverage. Check with your state to see if this applies to you.
Coverage Under a Parent’s Workplace Plan
If you get health insurance through your job, the easiest way to cover your children may be through that plan. The employer mandate of the Affordable Care Act (ACA; also known as Obamacare)1 requires that companies with more than 50 full-time employees or the equivalent provide health insurance to 95% of their employees and their children up to the age of 26.
But while large employers must offer coverage to dependents (which includes children but not a spouse), they don’t have to contribute to coverage for anyone but the employee.
Your company’s human resources department or the health plan administrator can tell you exactly what it will cost to cover your children under your workplace plan. If you and a co-parent or co-guardian both have access to job-based health insurance, you’ll want to compare costs and coverage to determine the smartest option for covering your kids. Just keep in mind that only one of you — not both — can cover your child(ren).
Smaller employers — meaning those with fewer than 50 full-time employees — are not required to offer health insurance, but many do. Again, reach out to your company’s human resources department or the administrator of the plan for details on coverage and cost.
In most cases, children can stay on a parent’s job-based health-insurance plan until they turn 26. But some states and plans have different rules, so be sure to check.
Your work-based plan might be a good option for your child if the premiums are affordable and you can enroll your child during the annual Open Enrollment Period or a Special Enrollment Period.
Coverage Through the Health Insurance Exchange or Private Coverage
If you don’t get health insurance through your job or you choose to opt out of the coverage that’s offered, you can purchase a family insurance plan or standalone coverage for your children on the federal Health Insurance Exchange (also called the Marketplace). Your state may also offer its own Health Insurance Marketplace.
You can enroll during the annual Open Enrollment Period, or, if you’ve had a “qualifying life event,” such as the birth of a child, adoption or a loss of health coverage, you’re also eligible to buy insurance during a Special Enrollment Period.
Kids on a parent’s Marketplace plan can remain covered through December 31 of the year they turn 26 (or the age permitted in your state).
However, if you have access to a job-based plan that meets ACA requirements “affordable” even if you don’t choose that coverage, there’s a big catch: You won’t be eligible for Obamacare subsidies, the discounts on your monthly health insurance payments (also known as premium tax credits). These subsidies are available to many people who qualify based on their income, but not for those in the situation described above.
This is true even if your employer doesn’t contribute to the cost of premiums for anyone but you, the employee. This is known as the “family glitch.”2 A licensed insurance broker can tell you more about how this affects your options as well as alternative plans you can buy directly through an insurance company (private plans).
If your income qualifies you for help paying your monthly premiums, an Exchange plan might be right for your child. But a private plan could be worth considering if you’re not eligible for those subsidies.
Coverage Through Children’s Health Insurance Program (CHIP) and Medicaid
The Children’s Health Insurance Program (called “CHIP”), provides free or low-cost health and dental coverage to eligible children, both through Medicaid and through separate CHIP programs. A partnership between the federal and state governments, CHIP is administered by individual states, following federal guidelines.
In general, the difference between eligibility for Medicaid and CHIP is based on family income. Medicaid is available to families with very low incomes, generally 138 percent or less of the federal poverty level, or FPL. CHIP provides healthcare coverage to children in families with incomes that are modest but not low enough to qualify for Medicaid. Children in a family of four earning up to $50,000 a year or more may qualify.3
Under Medicaid and CHIP, many families can get free health coverage for their children and teens. Others may need to pay a low fee to enroll or for monthly premiums and/or copayments for medical services. The rest of the cost would be picked up by the federal government and the state where you live.
While specific benefits may vary from state to state, in general, Medicaid and CHIP provide complete coverage for kids, including routine check-ups, immunizations, doctor’s visits, prescriptions, dental and vision care, inpatient and outpatient hospital care, laboratory and X-ray services, and emergency services and mental health services.
There’s no special enrollment period for Medicaid or CHIP; you can apply any time of the year. If you fill out an application through the Health Insurance Marketplace and it looks like anyone in your household qualifies for Medicaid or CHIP, your information will be forwarded to your state agency. Or you can apply directly with your state’s Medicaid or CHIP agency.
Keep in mind that if your children are eligible for CHIP, they won’t be eligible for Marketplace subsidies when you buy an ACA (Obamacare) plan. That means the CHIP coverage will likely be the more affordable option. You and other family members might still be eligible for Marketplace discounts.
CHIP might be a good option if your child is under the age of 19 and meets the eligibility requirements. If your child is a disabled adult, Medicaid may be the best option for ongoing coverage.
Coverage Through COBRA
If you’ve lost the health insurance you had at work because you’ve quit your job, been laid off or had your hours cut, you and/or your family members may be eligible for insurance coverage through the “Consolidated Omnibus Budget Reconciliation Act,” or COBRA.
COBRA requires any private company that has 20 or more employees to allow you to temporarily continue the group health insurance you had. If you work for the state or local government, chances are COBRA applies to your health plan, too. However, COBRA doesn’t apply to group health plans offered by the federal government or by churches and certain church-related organizations.
Under COBRA, coverage for dependent children can be continued for up to 36 months. You can elect COBRA for your kids alone, even if you don’t want coverage for yourself.
If you decide to enroll your children in COBRA, you’ll keep the same group insurance plan you already have. Your children will be able to see all the same doctors and you won’t be starting over with a new deductible.
Your employer, however, will usually not cover any of the costs. You’ll be responsible for paying the monthly health premiums in full, as well as an administrative fee that typically adds another 2% to that cost.
COBRA might be right for your child if you want to continue your employer-based coverage until you’re eligible for benefits under a new job or your child will be eligible for work-based insurance when he or she starts a new job.
Coverage Through a Qualified Medical Child Support Order (QMCSO)
If you get your health insurance through your employer and you’re getting divorced or separated, you may be required to cover your child(ren) if the state orders it to do so. This is called a Qualified Medical Child Support Order (QMCSO) — a judgment, decree or order issued by a court or through a state administrative process that requires that a child have health plan coverage. (This usually doesn’t include any state, local or federal government plans or those for employees of churches.)
The administrator of your group health plan determines whether the order is “qualified.” To learn more about QMCSO, talk to your plan administrator or your attorney.
Coverage for College Students
If your child is heading off to college, you’ll want to be sure that along with the necessary bedding and bathroom supplies, he or she has health insurance. In fact, many colleges require it.
Full-time students can often receive primary care services from the college health center for a small co-payment. But these clinics don’t provide more extensive care, like surgery, hospital stays or treatment for a serious illness. For that, you’ll need a comprehensive health insurance plan.
Many colleges automatically enroll students in their own insurance plan.4 The cost, which can be several thousand dollars, is automatically added to the tuition bill. If your child is already covered under a family plan, this may not be the most economical option. To avoid the charge of the college-sponsored plan you’ll need to apply for a waiver (generally required each year) and prove that your child has adequate insurance coverage. Also important: If your child is covered under your employer’s plan, make sure that it covers your son or daughter if they are “out of area,” which may be the case if they’re going to school out-of-state. This may be an issue, especially if you are covered by an HMO (health maintenance organization) or EPO (exclusive provider organization).
Colleges often have strict requirements for health insurance. If you don’t want to purchase the student plan, you might have to switch to a different plan than the one you already have to meet their requirements. It’s a good idea to start evaluating health insurance options as soon as you know what college your son or daughter will be attending. That way you’ll be able to make a change to a new plan, if necessary, during the Open Enrollment Period.
A student health plan might be right for your child if the cost or premiums compares favorably to other options.
Coverage Through Short-Term Health Insurance
If you need temporary health insurance for your child until he or she can get a more full-featured permanent plan, a short-term policy might be a helpful bridge.
Generally speaking, these plans offer coverage from 30 to 364 days, depending on where you live. One big caveat: Short-term health insurance may not be available at all in your state and the coverage it offers typically isn’t as comprehensive as other plans. Some states prohibit the sales of these policies and in several other states the policies are so tightly regulated that few or no insurers offer them.
It’s important to know that short-term health insurance doesn’t cover the 10 “essential health benefits” mandated by the Affordable Care Act and deductibles can soar to $10,000.
But short-term insurance does offer flexibility (you can enroll right away online if you qualify) and low cost (as little as $20 a month for premiums). This kind of insurance might be an option worth considering if you expect other health insurance, like the plan offered at a new job, to kick in soon; you’re waiting to change plans during the next Open Enrollment Period; or your son or daughter is about to age out of your plan.
Short-term health insurance might be a good choice if it’s available in your state, you or your child are between jobs, your child is a college student who’s about to graduate and get health insurance through his or her job, or you’ve missed your company’s Open Enrollment Period to add your child to your work-based plan.
Coverage Through a Catastrophic Health Insurance Plan
Catastrophic health insurance is available to anyone under the age of 30. Premiums are generally very low for these plans, but deductibles are high ($8,550, in 2021).
For healthy children and young adults, they might be an attractive option since the plans cover the 10 essential health benefits of other ACA plans, certain preventive services at no cost and at least three primary care visits before the deductible is reached.
These catastrophic plans are also available to people over the age of 30 who qualify for a hardship exemption.
Catastrophic health insurance might be a good option if your child is healthy, doesn’t see doctors frequently or have high prescription medicine costs. The premiums are more affordable compared to other options.
Coverage Through a Cost-Sharing Service
A faith-based health plan, also known as a health-sharing ministry or health care-sharing ministry, is an alternative to a traditional health insurance policy.
Working more like a community-based credit union or a membership-driven cooperative than a health insurance plan, these plans “share” healthcare costs among the members of the group.
Members pay “monthly sharing amounts,” which are typically less than premiums, ranging from $100 to $500 based on the plan and the size of their family. Generally, you can enroll a single member of your family, including a child.
Faith-based healthcare groups, which are typically Christian, are exempt from the mandates of the Affordable Care Act, and do not have to provide the ACA’s essential benefits. They are also not required to cover preexisting conditions and are generally not subject to government oversight. These groups are not under the legal obligation to pay medical claims and some groups may have limited assets.
What’s more, faith-based healthcare groups may require that members agree to live in accordance with certain religious beliefs, such as not smoking or drinking alcohol. As a result, medical ministries may refuse to cover costs associated with these lifestyle choices or for services that don’t align with their religious or ethical beliefs, such as certain forms of birth control.
Faith-based healthcare might be right for your child if you choose a reputable plan, you’re aware of the risks and belief-driven healthcare is important to you. Keep in mind that if you live in a state with a healthcare mandate, this type of coverage may not qualify.
Coverage Through a Fixed-Indemnity Plan
Fixed-indemnity health insurance is a supplemental plan that can help manage out-of-pocket costs. This means that it’s not a standalone plan for coverage on its own. While it can be useful under some circumstances, a fixed-indemnity plan is no substitute for a primary health insurance plan and is not suitable as the only coverage for your child.
Next Steps
If you’re ready to choose a health insurance plan for your family, it’s time to consider a number of factors: You’ll want to compare all the options that are available to you — which might range from adding your child to your workplace insurance plan to finding coverage under CHIP or buying a short-term or catastrophic plan.
Take time to consider, too, the specifics about your child or children, including their age and whether they’re in good health or have a chronic condition or disability. If your son or daughter is nearing college age or employed or about to start a job that will provide benefits, these can all influence the choice you make.
The best options for your family aren’t always obvious. A licensed health-insurance broker can guide you in weighing what works best for your family when it comes to both cost and coverage.
