The Affordable Care Act created a national mandate for health insurance coverage throughout the country. The ACA mandate requires healthcare coverage for all relatives in your household. As a rule, the ACA regulations make adults responsible for obtaining insurance for their dependents.
Unless you cannot claim your stepchildren as dependents on your taxes, you're responsible for enrolling them in a health insurance plan through your employer, the healthcare marketplace or another source. National and state insurance laws affect which health insurance options are available to you.
Unless your health care coverage falls into a unique category, you might be allowed to add your stepchildren to your existing health insurance. As the U. S. Department of Labor notes, Medicare is one national healthcare insurance plan that has no provisions for dependent coverage. This federally provided health insurance only covers taxpayers who have reached age 65, have been diagnosed with severe kidney disease or are younger people with certain disabilities.
IRS Qualifying Dependent Requirements
Stepchildren meet the IRS relationship requirement to be a qualifying tax dependent and to be eligible as a health insurance dependent. In addition, the IRS uses a residency test to define a qualifying relative or dependent. This test requires that your stepchild live in your household at least six months out of the year. Finally, your stepchild must have a valid Social Security number and be a legal resident or U.S. citizen to be a qualifying tax dependent.
Affordable Care Act Plans Dependents
Under ACA regulations, insurers that offer health insurance plans through ACA marketplaces must provide options for your qualifying dependents that you need to enroll in a health insurance plan. Qualifying stepchildren in your family also have the right to stay on your ACA family plan up to age 26. These provisions also allow your married stepchildren to be covered by your family's ACA health plan.
Dependents on Employer-Provided Insurance
The IRS states that ACA rules for dependent coverage do not apply to every employer-provided health insurance plan. The employer shared responsibility provisions in the ACA apply only to employers who employ at least 50 full-time workers annually. The group plans offered by these applicable larger employers must meet minimum requirements and provide coverage for dependents. These ACA requirements generally won’t apply to many small businesses, and they do not apply to employees who work part-time.
However, your responsibility to supply health insurance for your dependents still exists. If you claim your stepchildren as dependents, you’ll also need to show that you are providing health coverage for them. This coverage must meet ACA’s minimum requirements. If your employer’s plan doesn’t offer coverage for your stepchildren, you can elect to enroll your entire family in an ACA marketplace plan that meets your needs.
State Regulations on Dependents
The state you live in might have additional requirements for private insurers and employer group plans than those in the ACA. The National Conference of State Legislatures tracks state-level health insurance requirements that can affect your family’s options. At least five states let your dependents stay on your health plan after age 26 when they don’t have access to an employer-sponsored plan.
New Jersey allows dependents up to age 31. Wisconsin law lets students of any age stay on your family’s plan while they are enrolled full-time.
- U. S. Department of Labor:Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Businesses and Families FAQs
- HealthCare: Health Insurance Rights & Protections
- Internal Revenue Service: Employer Shared Responsibility Provisions
- National Conference of State Legislatures: Dependent Health Coverage and Age for Healthcare Benefits
- U.S. Department of Labor. "Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Businesses and Families FAQs." Accessed Mar. 25, 2020.
- Healthcare.gov. "Health Coverage for Self-Employed." Accessed Mar. 25, 2020.
- U.S. Small Business Administration. "Plan to Offer Employee Benefits." Accessed Mar. 25, 2020.
- Healthcare.gov. "Small Business and the Affordable Care Act (ACA)." Accessed Mar. 25, 2020.
- Medicare.gov. "What's Medicare Supplement Insurance (Medigap)?" Accessed Mar. 25, 2020.
- HealthCare.gov. "No health insurance? See if you'll owe a fee."
- Kaiser Family Foundation. "2019 Employer Health Benefits Survey: Section 1: Cost of Health Insurance." Accessed Mar. 25, 2020.
- eHealth. "How Much Does Individual Health Insurance Cost?" Accessed Mar. 25, 2020.
- Healthcare.gov. "Enroll In or Change 2020 Plans — Only With a Special Enrollment Period." Accessed Mar. 25, 2020.
- U.S. Department of Health and Human Services. "Lifetime & Annual Limits." Accessed Mar. 25, 2020.
Carol Luther has published feature articles in print magazines, ghostwritten blogs, and produced digital content since 2007. She has published personal finance and small business articles for the Houston Chronicle, Mahalo, the Nest, USA Today, Wahm, and Zacks. Carol has designed, implemented and managed multi-year, multimillion-dollar domestic and international projects services for higher education, nonprofits, and small to medium businesses for more than 20 years.