Can I Put My Parents On My Health Insurance?

Fran
Lucy Lazarony
August 12, 2020

Here’s a switch. Now it is time to take care of Mom and Dad. There are some insurance companies that will allow you to add a parent as a dependent to your health plan. And they may require that you’ve already listed your parent as a dependent on your taxes. According to Healthcare.gov, the website for the Health Insurance Marketplace, dependent parents can be included in your household, as long as you already claim your parents as tax dependents. So the first step to getting healthcare for a parent is claiming them as a dependent on your taxes. To learn more about claiming dependents, check out Publication 501.

Already claiming a parent as a dependent on your taxes? Reach out to your current insurance company and find out if you will be able to claim a parent as a dependent on your plan. You won’t know unless you ask. Be sure to tell the insurance company that you already claim your parent as a dependent on your taxes. If they allow parent dependents, you should be all set. But they may have their own dependency requirements that you will have to meet as well, such as a parent living with you and you providing for him or her financially.

Every insurance company has explicit outlines regarding who may qualify as a dependent. And for most insurance companies, children and spouses are the two groups that qualify as dependents. But there are exceptions to the rule that allow parents, such as TRICARE for military families.

TRICARE Coverage for Military Families and Parents

TRICARE is a healthcare program for U.S. service members and their family members. With TRICARE, if you have a dependent parent or parent-in-law and if you’re on active duty for more than 30 days, your dependent parents or parents-in-law can get care in military hospitals and clinics. They also can enroll in TRICARE Plus, which is a primary care program offered at some military hospitals and clinics.

This is a nice benefit for military members and their parents.

Health Insurance Marketplace and Private Insurance

As mentioned above, in many cases a dependent parent may be included in your health plan, if you have a private health insurance plan or a marketplace plan. But you do need to already be claiming each parent as a tax dependent. If you are doing that, you may be able to add a parent or parents to your Health Insurance Marketplace plan.

The federal government operates the Health Insurance Marketplace for residents in most states. Twelve states and the District of Columbia operate their own marketplaces for healthcare. The main difference between private health plans and marketplace plans if that some on the marketplace are subsidized. The states with their own marketplaces are California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont and Washington.

If you live in these states, you will need to check with your state marketplace to see if you may add a parent to your health plan. Or, speak with an agent to find out if a comparable private health insurance plan will cover your parents as dependents. Private health plans don’t necessarily cost more than marketplace plans, especially if you do not qualify for a subsidy.

Employer Health Plan

Got an employer health plan? Check with your health insurance company directly about adding a parent as a dependent on your health insurance. You also may want to reach out to your company’s human resources department for additional assistance.

If your insurance company won’t allow you to add a parent as dependent on your health plan, you could help your parents find an individual policy of their own.

The Health Insurance Marketplace has a variety of plans for individuals and they may be able to find an affordable option if they are low income. And if a parent’s income is low enough, they can always apply for Medicaid in their state. Otherwise, they can compare the best options for health insurance using SmartFinancial’s app.

And once they are over 65, they may qualify for Medicare coverage. So there are healthcare options for a parent even if you are not able to add them to your insurance plan. Let’s take a closer look at the Medicaid and Medicare options.

Medicaid

In all states Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly and people with disabilities. In some states, Medicaid covers all low-income adults below a certain income level.

In states with expanded Medicaid programs, a parent will qualify for Medicaid if she or he earns up to 138 percent of the federal poverty line. For 2020, the poverty guidelines are $12,760 for one person.

So if your parent’s income is low enough, encourage them to apply for Medicaid in their state. If they qualify, their healthcare needs may be met at little or no cost.

Medicare

Once a parent reaches the age of 65, they will have more healthcare options. Most people age 65 or older are eligible for medical hospital insurance coverage, Medicare Part A, if they have worked enough and paid enough Medicare taxes. You can also buy Part B coverage at a low monthly rate. It’s advised that your parent sign up for Part B as soon as they are eligible, or else they will pay a fine each year going forward.

Certain people younger than 65 can qualify for Medicare as well, including those with disabilities. You may want to check to see if a parent is eligible for Medicare even if they are younger than 65. It is worth checking out, especially if your parent has a disability.

A Dependent Care Flexible Spending Account

It is not healthcare for Mom or Dad, but a dependent care flexible spending account can be a big help to family caregivers. A dependent care flexible spending account is an account that lets you set aside pre-tax money to help pay for dependent care and services. Examples of eligible dependent care services would be care and services for elderly parents or other qualified dependents who are physically or mentally incapable of self-care.

Contribution limits for a dependent care flexible spending account varies from employer to employer but typically you can put in up to $5,000 annually per household. The money in a dependent care flexible spending account does not roll over from year to year. So you will want to spend the money in its entirety. Check with your employer to see if a dependent care flexible spending account is available with your company. It can be a way to save money on taxes while you are doing good taking care of a parent.

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