Can You Add Your Elderly Parents to Your Insurance?

Children with elderly parents want the best for them, including the security of knowing their medical needs are taken care of. Although we generally grow in wisdom as the years go by, we know our bodies and minds start showing our life experiences through various health conditions.  

According to the Centers for Disease Control and Prevention (CDC), personal health care expenditures accounted for the largest share of total national health expenditures in 2019, pre-Covid. Personal healthcare includes hospital care, physician and dental services, eyeglasses, prescription drugs, and nursing home care. Access to quality medical services is expensive, so you might wonder if adding your elderly parents to your health insurance could help cover costs. Is it possible?       

Can You Add Your Senior Parents to Your Insurance?  

As with most medical and insurance-related matters, the question of whether you can add your parents to your insurance is complicated. No mandate requires health plans to offer coverage for parents on their children’s insurance. In the FAQ section of a national health insurance provider, their response to the question whether a person can add their parents or spouse’s parents to their plan was as follows: “No, you cannot include your parents on the plan. They must enroll in their own health plan through their job, an individual insurance plan, or Medicare (if they are eligible).”

However, this does not mean that all insurance providers have the same policy. It is best to find out from your employer if your parents can be added to your health plan. If your parents are not eligible for the employer-sponsored plan, Medicaid, or Medicare, the next best consideration would be getting them private health insurance.  

When Are Your Parents Considered Dependents?    

There is, however, one instance in which your elderly parents, stepparents, or parents-in-law could possibly be included in your insurance plan. If you claim them as dependents on your federal income tax return, some health plans might allow your parents to be added. 

The Inland Revenue Service (IRS) has strict eligibility requirements if you want to declare one or both parents as dependents. It is advisable to consult with a tax professional on your situation, as there might be tax benefits or implications you are unaware of. The IRS eligibility requirements include:

• They must be citizens or residents of the United States
• Their gross income must be less than $4,300 per year
• They cannot be someone else’s legal dependent
• You must provide for more than half of their financial needs per year.   

If you pay more than half the cost of keeping your parent in a nursing home or assisted living community, the IRS counts it as providing for more than half their annual financial needs. 

How Do You Add Your Parents to Your Insurance?

If you are fortunate enough to have insurance that allows your parents to be included, you can add them during the policy’s open enrollment period. As you know, the enrollment period for most plans usually runs from November through the end of the year, with coverage starting in the new year. There are instances where you are allowed to add a dependent at other times, such as a parent losing their job, losing their medical insurance coverage, or if their spouse passes away.

When Should You Add Your Parents to Your Insurance?

The reasons and timeline for adding elderly parents to your insurance depends on personal circumstances. It could be sudden due to the losses mentioned above, developing circumstances such as an Alzheimer’s diagnosis, or a decision made after estate planning discussions. 

There is a growing awareness that family dynamics have changed. For example, the state of California signed into law what is informally called the “Parent Healthcare Act”, thereby expanding the definition of dependents to include qualifying parents and stepparents. Individual health plans are required to cover qualifying parents on their children’s health insurance, if the parents are not eligible for Medicare or don’t have enough Social Security quarters for free Medicare Part A coverage. 

If you would like more information about long-term care offered to senior adults in NJ, because you are concerned about your elderly parents, please contact us today or visit our website at: https://umcommunities.org/

This blog was originally published at https://umcommunities.org/umc-corp/news/insure-your-parents/