How to know if you have enough health insurance

How to know if you have enough health insurance

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Does your health insurance give you peace of mind? Or are you worried your employer-offered coverage just doesn’t do enough?

Supplemental health benefits fill in the gaps where health care coverage falls short.

So don’t worry about hospital bills, the after-effects of a car accident or getting proper medical care after a heart attack or stroke. With supplemental health insurance, you can get the coverage you need for true peace of mind.

The best way to go about buying supplemental health benefits involves several key steps. “First, get to know your existing coverage,” says Greg Feste, CEO of Rezilient Direct. “That way, you can identify where the gaps occur and know what kind of supplemental benefits you need. The right supplemental coverage will pay for costs that won’t be covered by your primary insurance. But it shouldn’t replace your primary coverage. It’s an additional policy.”

Supplemental health insurance also offers certain benefits that your primary coverage won’t. “Think of it as a customizable benefit,” Greg Feste advises. “Many of the policies offer advantages that primary insurances don’t, such as no deductible or waiting period. Often cash benefits will be paid out to you. In addition, the plans typically don’t have contingencies, so you’ll get the benefits regardless.”

Before you buy the coverage, talk to an expert about the types of benefits you can get with supplemental insurance, which can cover expenses such as:

  • Medication.
  • Hospital stays.
  • Deductibles.
  • Copayments.
  • Coinsurance.
  • Transportation.
  • Food.
  • Childcare.
  • Income replacement.
  • Long-term care.
  • Other costs associated with a hospital stay, accident recovery or illness.

Some of the most popular types of supplemental health insurance includes dental and vision, accident, critical illness, cancer, hospitalization, heart and stroke, term life and short-term disability.

Contrary to what many people think, supplemental health insurance is a cost-effective and affordable solution. “It’s a wise financial investment for people who have plans with a high deductible,” reports Greg Feste. “To keep costs low, often people will choose a high-deductible employer-provided insurance plan to lower monthly premiums. However, the downside is higher costs out of pocket.”

With supplemental health benefits, you can get some relief from these costs. Just be sure to choose a plan that ensures coverage for deductibles and related out-of-pocket costs associated with care. Plans are very affordable, with “some plans costing as little as $12 to $15 a month for an individual, and for families, it’s just slightly higher, around $20 to $30 per month,” says Feste.

Still not sure you need supplemental health coverage? Grab a calculator and run some numbers. Add up all of the health care costs you incurred last year, including out-of-pocket expenses and deductibles. Tack on at least a $10,000 bill for a major medical event and estimate how much of that bill you’d be responsible for (this is the average lowest cost for a major medical event – should one happen to you or a family member).

Then, calculate if these costs over the year add up to more money than you’d pay for supplemental insurance. If they do, consider purchasing supplemental health benefits to prevent a major health care event from creating a devastating and lasting impact on your financial health.

For most consumers, it pays to get a supplemental plan, especially one that would cover lost wages or a mortgage payment – should you have to stay in the hospital for a long time. The coverage provides true and lasting peace of mind, for just pennies on the dollar. So what are you waiting for? Go talk to your insurance professional to review your existing coverage and discuss options for purchasing supplemental benefits.

How to know if you have enough health insurance

You also need to disclose your social habits to the insurer

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As ET Wealth completes 10 years, we present the compressed wisdom of this eventful journey. Here are the best stories from the decade on insuring.

Do you need more cover?
If you have not taken adequate life insurance, you are putting the future of your dependants at risk.

Determining the size of the cover is insurance buyers’ foremost concern. One broad estimate is that it should be 6-7 times one’s annual income. This, however, is not cast in stone. A person earning Rs 9 lakh a year (Rs 75,000 per month), for instance, may need more cover than the Rs 54-63 lakh suggested by this approach.

Don’t be lulled into thinking that a cover of Rs 60 lakh is enough. Even if you assume 9% returns and 8% inflation, an inflation-adjusted monthly withdrawal of Rs 30,000 will deplete the entire corpus in less than 20 years.

The life insurance cover should be big enough to generate income that can take care of the expenses of the family till your dependants become self-sufficient. If your spouse is a dependant, the cover should also provide for her retirement needs. Then comes the issue of debt. The money received should be able to settle all outstanding loans, especially big ticket home loans. The insurance should also provide for crucial financial goals, such as a child’s higher education and marriage. These are one-time expenses and their present cost should be taken into account to determine the cover size.

Choosing the right cover
The policy should cover you at least till the age of 60-65. Don’t take a short-term policy of 15-20 years that will terminate when you are in your 50s. At that age, buying a new policy will cost you a bomb. You might even be denied the cover if your health is not good.

Insurers have also devised new variants of term plans. While some of these innovations offer real value to the buyer, others are only marketing gimmicks that are best avoided. For instance, the reducing cover plans meant to cover loans are not very useful. These are single premium plans and are linked to the outstanding loan. However, most borrowers tend to prepay their loans or switch to another lender.

Insurance companies are supposed to refund some of the premium in case of a foreclosure or make an endorsement in the name of the new lender if the loan has been refinanced. In reality, they just fob off the customer saying the contract has been terminated.

On the other hand, the staggered payouts option is a useful feature, especially in a country like India where financial literacy is abysmal. The average person may not be able to handle a large say that to avoid losing sleep, choose a company that is doing well and is not likely to close down or leave Indian shores.

Don’t avoid medical tests
Contrary to popular perception, rigorous medical tests help the buyer. Once you have gone through them, there is no chance of the claim being denied on account of pre-existing diseases. The more stringent the test, the lower is the premium.

Be honest
You also need to disclose your social habits to the insurer. If you smoke or chew gutkha, your premium will be roughly 25-30% higher than that of a non-smoker. Hiding these crucial facts can jeopardise your insurance cover. If the insurer finds out that a policyholder concealed information that affected the risk to his life, out goes the claim. Most companies have medico-legal experts who scan the claim documents for any attempt to mislead. Besides the health condition and social habits, you should also be completely honest about your age, occupation, income and other insurance cover.

(Originally published on 26 Jan, 2015)

Insurance you need for each life-stage

25 years: Single & employed

  • Life insurance: Online term plan of Rs 20 lakh for 30 years.
  • Health insurance: Rs 3 lakh base cover (annual).
  • Personal accident & disability covers: Rs 25 lakh
  • Property insurance: Nil
  • Salary: Rs 30,000/month

30 years: Married, no kids

  • Life insurance: Raise to Rs 30 lakh via top-up plan. Working spouse Rs 20 lakh.
  • Health insurance: Retain Rs 3 lakh cover; convert to fmily floater plan.
  • Personal accident & disability covers: Rs 25 lakh
  • Property insurance: Rs 5 lakh to cover household contents.
  • Salary: Rs 45,000/month; spouse salary: Rs 35,000

35 years: Married with kids

  • Life insurance: Rs 80 lakh for 25 years; spouse Rs 45 lakh for 30 years.
  • Health insurance: Raise family floater to Rs 5 lakh. Buy critical illness plan of Rs 3 lakh.
  • Personal accident & disability covers: Continue with existing covers.
  • Property insurance: Buy Rs 50 lakh cover for a Rs 40 lakh house. Review contents.
  • Salary: Rs 75,000/month; spouse salary: Rs 55,000. Rs 30 lakh home loan; Rs 4 lakh car loan; 2 kids

45-50 years: Middle age, older kids

  • Life insurance: Continue with existing covers.
  • Health insurance: Raise family floater to Ts 7.5 lakh and critical illness plan to Rs 5 lakh.
  • Personal accident & disability covers: Continue with existing covers.
  • Property insurance: Review to account for inflation and increase in contents

60 years: Retirement

  • Life insurance: No cover needed after 60.
  • Health insurance: Raise cover to Rs 10 lakh..
  • Personal accident & disability covers: Don’t buy fresh cover.
  • Property insurance: Raise cover to Rs 60 lakh


(Originally published on 26 Aug, 2013)

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How to know if you have enough health insurance

How to know if you have enough health insurance

The road to amazing health care is paved with an amazing health plan. But how do you know if your plan is truly a diamond in the rough?

Generally, a solid plan has the exact flurry of benefits that your team is looking for. It’s also crisp on the compliance front so you can breathe easy knowing that you’re following the law.

Get the latest articles, info, and advice to help you run your small business. Delivered weekly.

How to know if you have enough health insurance

To help you unearth a plan that is fueled by both of those characteristics (and more!), we’ve done some homework for you. All you need to do is keep scrolling.

What your health plan should cover

No matter what type of health plan you go with, you should expect the following things to be covered:

  • Doctor visits
  • Prescription drugs
  • Outpatient treatments
  • Hospitalizations
  • Maternity care
  • Preventive care, including mammograms and vaccines
  • Rehabilitation
  • Anything else that your employees use often

The last bullet point is important. If your employees use something like chiropractic care, make sure you find a plan that either covers the service or has a deductible that’s low enough so they can continue to get treatment. When you present your team with their summary plan description, they’ll be able to find out whether the services they need are actually covered.

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The Affordable Care Act contains something called the “minimum value standard,” which states that if you have 50 or more employees, your plan needs to cover, on average, at least 60 percent of each person’s medical expenses.

But the best health plans include even more than that. When a plan pays for all the essentials, like doctor visits to primary care physicians and specialists, outpatient treatments and more, your employees’ gratitude will go through the roof.

START HERE

When you fill out a health insurance application and use some tools on this website, you’ll need to estimate your expected income. Two important things to know:

  • Marketplace savings are based on your expected household income for the year you want coverage, not last year’s income.
  • Income is counted for you, your spouse, and everyone you’ll claim as a tax dependent on your federal tax return (if the dependents are required to file). Include their income even if they don’t need health coverage. See details on who to include in your household.

How to make an estimate of your expected income

Step 1. Start with your household’s adjusted gross income (AGI) from your most recent federal income tax return. You’ll find your AGI on line 7 of IRS Form 1040.

Step 2. Add the following kinds of income, if you have any, to your AGI:

  • Tax-exempt foreign income
  • Tax-exempt Social Security benefits (including tier 1 railroad retirement benefits)
  • Tax-exempt interest

Step 3. Adjust your estimate for any changes you expect.

Consider things like these for all members of your household:

  • Expected raises
  • New jobs or other employment changes, including changes to work schedule or self-employment income
  • Changes to income from other sources, like Social Security or investments
  • Changes in your household, like gaining or losing dependents. Gaining or losing a dependent can have a big impact on your savings.

Now you have an estimate of your expected income.

More details on reporting income and household members

  • See who to include in your household
  • What income to include in your estimate

Estimating unpredictable income

It’s hard to predict your income if you’re unemployed, self-employed, on commission, or on a work schedule that changes regularly.

If your income is hard to predict, base your estimate on your past experience, recent trends, what you know about possible changes at your workplace, and similar information. If the job is new to you, ask people in the same field or in the same company about their experiences.

Learn more about how to estimate your expected income if you’re:

IMPORTANT Update your Marketplace application as soon as possible when your income or household members change during the year. Learn how to update your information during the year.

More answers: Income & household size

If the Marketplace tells you to provide pay stubs, self-employment records, or other information to verify your income, follow these directions to upload documents.

The Heath Insurance Marketplace uses an income figure called Modified Adjusted Gross Income (MAGI) to determine the programs and savings you qualify for. For most people, it’s identical or very close to Adjusted Gross Income (AGI). MAGI is not a line on your federal tax return.

The estimate instructions above are based on MAGI, but it’s not a term you need to know in order to apply or use tools on this site.

Start with “federal taxable wages” for each income earner in your household.

  • You should find this amount on your pay stub.
  • If it’s not on your pay stub, use gross income before taxes. Then subtract any money the employer takes out for health coverage, child care, or retirement savings.
  • Multiply federal taxable wages by the number of paychecks you expect in the tax year to estimate your income.
  • See what other household income sources to include.
  • Adjust all income amounts for expected changes during the year.

Marketplace savings are based on income for all household members, not just the ones who need insurance.

If anyone in your household has coverage through a job-based plan, a plan they bought themselves, a public program like Medicaid, CHIP, or Medicare, or another source, include them and their income on your application. When you apply you’ll say which household members need coverage.

Report income and household changes on your Marketplace insurance application as soon as possible. If you don’t, you could wind up with the wrong amount of savings or even the wrong insurance plan. Learn how to update your income during the year.

There are some differences, depending on your state and other factors. The Marketplace application may ask you specific questions to see if you’re eligible for Medicaid. If it looks like anyone in your household qualifies for Medicaid or the Children’s Health Insurance Program (CHIP), we’ll send your application to your state agency. They may ask you for more information. If it turns out you’re eligible, they’ll help you enroll.

The Affordable Care Act (ACA) requires you to have health insurance. The ACA is set up to make it easier for people who can’t afford health insurance to get it. It is an attempt to make health care more affordable for everyone by reducing the number of people that can’t pay their medical bills. When medical bills cannot be paid, doctors and hospital staff cannot be paid, supplies cannot be purchased and services dwindle. This causes prices to rise to cover medical supplies and services.

The ACA set up penalties for not having health insurance to try to keep people from not being able to pay their medical bills. This portion of the ACA was repealed in 2019, with the authority to enforce health care transferred to the states.

Enrolling in a health care plan is the right thing to do. It can keep costs down for everyone, and ensure you are taken care of when you need it. If you are under the age of 26, you can stay on your parent’s insurance plan until you can afford your own, or you can enroll during the enrollment period.

What Happens If I Don’t Have Health Insurance?

When the ACA went into effect, if you chose not to have health insurance, you faced a fine. This fine was called the Shared Responsibility Payment.

As of 2019, the fine is no longer enforced by the federal government. However, depending on the state you live in, you may be required to pay a fee when you file your state taxes if you do not have health insurance.   Be sure to check your state health care regulations to be sure.

If you are fined, it could be a significant amount, so if you decide to take the chance of not having health insurance, you should be ready to pay this amount and factor it into your budget.​  

Keep in mind that there are financial risks associated with forgoing health insurance, such as not being able to pay for any health care. This can turn into large amounts of debt should you need more than minor care. This is why you should consider health insurance a necessity instead of a luxury.

Reasons to Get Health Insurance

While you may not want to spend the money on health insurance, there are a wide variety of reasons that you need to get health insurance.

It can be very expensive to deal with an unexpected medical emergency like appendicitis or a broken leg from recreational activities. According to HealthCare.gov, casting a broken leg can cost up to $7,500. If you need to stay in the hospital for 3 days, expect close to $30,000 just for staying there.  

Medical debt can bankrupt you. If you are out skiing or biking and fall and break both legs, you’ll be in the hospital for a few days. $15,000 for the broken legs and $30,000 for the 3-day stay will suddenly put you in $45,000 of debt. Many hospitals will work with you to set up a payment plan, but the minimum payments may still be more than you can afford and it may take you decades to pay off the debt.    

Health insurance makes it easier to get preventive care so that you do not need more expensive procedures later. Taking care of small things like ear or sinus infections can prevent you from developing more serious complications.

Many plans help cover the cost of annual physicals. Annual physicals can identify unknown medical problems, possibly preventing you from collecting unexpected medical bills.​  

Are There Affordable Options?

There are a variety of ways that you can obtain affordable health insurance. You may consider a high-deductible health plan (HDHP), which offers lower monthly premiums but uses higher deductibles.   If you do choose this option, you could set up a Health Savings Account (HSA). An HSA is an account that you save money in, that lets you cover medical payments with tax-free earnings.  

You may be able to get coverage under your parents’ health insurance, as long as you are under the age of 26.   You should also explore health insurance offered by your employer, or even independent health insurance.    

However, the most affordable option may be through your state’s health insurance exchanges. These exchanges are websites set up to assist you in finding health insurance plans that are right for you.  

When choosing a health insurance plan, you should carefully choose the best policy that is currently available to you. Take the time to review your options and choose a policy that will work for you, your budget and your health needs.

What Is the Time Frame to Enroll?

The health insurance open enrollment period is the time of the year when people can enroll in a health insurance plan.   If you enroll during this time, you will be covered for the upcoming year.   This date changes every year, so be sure to check back towards the end of the year and make sure you are covered.  

If you truly cannot afford health coverage, you may want to see if you qualify for Medicaid.   You no longer need to file for an exemption if you cannot afford healthcare.   Check with your state legislature for filing for a health care exemption.

If you miss the deadline to enroll, you may face state fines if your state imposes them, so be sure to stay on top of your enrollment.  

You are able to enroll at Healthcare.gov. If your state is listed on HealthCare.gov, you’ll need to click on your state’s link and enroll on their website.  

You can also enroll in independent health insurance throughout the year. An insurance agent can help you determine if the plan meets the basic qualifications.  

If you’re retired and need health coverage, you can use the Marketplace to buy an insurance plan.

If you have retiree health coverage, you have different choices to consider.

If you retire before age 65 without health coverage

If you retire before you’re 65 and lose your job-based health plan when you do, you can use the Health Insurance Marketplace® to buy a plan.

Losing health coverage qualifies you for a Special Enrollment Period. This means you can enroll in a health plan even if it’s outside the annual Open Enrollment Period.

If you want to enroll because you lost your job-based coverage, see our Special Enrollment Period page for more information.

When you fill out a Marketplace application, you’ll find out if you qualify for a private plan with premium tax credits and lower out-of-pocket costs. This will depend on your income and household size.

You’ll also find out if you qualify for free or low-cost coverage through the Medicaid program in your state.

If you have retiree health benefits

If you have retiree coverage and want to buy a Marketplace plan instead, you can. But:

You can’t get premium tax credits and other savings based on your income. This is true only if you’re actually enrolled in retiree coverage. If you’re eligible for but not enrolled in retiree coverage, you may qualify for premium tax credits and lower out-of-pocket costs based on your household size and income.

If you voluntarily drop your retiree coverage, you won’t qualify for a Special Enrollment Period to enroll in a new Marketplace plan. You won’t be able to enroll in health coverage through the Marketplace until the next Open Enrollment period.

More answers: Coverage for retirees without Medicare

Yes. You can get a Marketplace plan to cover you before your Medicare begins. You can then cancel the Marketplace plan once your Medicare coverage starts.

You may be able to buy insurance in the Marketplace and get lower costs on monthly premiums and out-of-pocket costs based in your household size and income.

Yes. Losing job-based coverage qualifies you for a Special Enrollment Period. This means you can enroll in a health plan outside of Open Enrollment. You can apply to the Marketplace with a Special Enrollment Period any time from 60 days before and 60 days after your separation date.

  • If your COBRA coverage runs out outside Open Enrollment, you qualify for a Special Enrollment Period. This means you can enroll in a Marketplace plan outside the annual Open Enrollment Period.
  • But you can’t choose to drop your COBRA coverage outside Open Enrollment and enroll in a Marketplace plan instead. The Special Enrollment Period applies only if your COBRA coverage runs out.
  • During the annual Open Enrollment Period, you can drop your COBRA coverage even if it’s not running out and replace it with a Marketplace plan.

Medicaid is one of the most famous entitlement programs in America, but there is some confusion on who can apply and how they can do it. Medicaid is available to people who fit into several categories, including those with very low incomes, some who are disabled and the children of people who fit into various categories. If you’re thinking about trying to qualify for Medicaid, you need to know whether you qualify. One of the most common questions has to do with private health insurance. Are you barred from seeking Medicaid if you already have insurance? The short answer is “no,” but there are other questions to answer about your financial situation.

Medicaid eligibility varies from state to state
The first thing to know about Medicaid eligibility is that there is no singular national standard. The original version of the Affordable Care Act sought to force states to expand Medicaid to include people up to a higher level of income. The Supreme Court struck this down as unconstitutional, though, leaving states to make a choice on expansion. While some states chose to expand the program, others chose to keep it the same. This has let to a hodgepodge of state requirements.

General financial requirement for this means-tested program
Medicaid qualifies as what’s known as a “means-tested” program. This means that if you are going to receive assistance, you’ll need to meet the government’s standard for neediness. In most states, you can receive Medicaid so long as you earn 200% of the federal poverty level or less. In some states, this figure is much lower. People living either in poverty or right at the federal poverty level can generally qualify.

This is true whether you have private insurance or not. Some people are lucky enough to work for employers that provide insurance coverage. In many instances, those people are also earning very little money in their jobs. The test for Medicaid eligibility is not whether you receive insurance from an employer or from the private marketplace. Rather, it has to do with your level of income and other eligibility factors.

Medicaid assistance for qualifying applicants who already have insurance
If you already have insurance coverage but want to apply for Medicaid, you should know that the program will work a bit differently in your case. For the typical person who does not have insurance, applying for Medicaid will mean that they will receive coverage under the program. If you already have insurance coverage, then you are eligibility to receive premium assistance through the Medicaid program. The program will recognize that you are struggling to pay your premiums, so you can keep your current insurance while receiving a helpful check from the government.

Those who want to receive Medicaid should check their state law to see the income cutoff and other eligibility requirements. You aren’t barred just because you have insurance, but the benefits you receive will be somewhat different from the person who seeks Medicaid while having no insurance at all. Your state’s health department can provide information on how to best handle these issues.

How to know if you have enough health insurance

Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!

By Jason Heath on January 29, 2020

By Jason Heath on January 29, 2020

Most people have health insurance coverage during their working years, but their employer picks up at least some of the cost. For retirees, the economics of buying similar coverage may not add up. Here’s why.

How to know if you have enough health insurance

Photo created by snowing – www.freepik.com

Workplace health and medical coverage is a common employee benefit but, for many Canadians, retirement means an end to supplementary health insurance coverage. Some lucky retirees have ongoing coverage as a continuing benefit paid for by their employer, although sometimes even retiree coverage is optional and paid for by the individual.

Whether a retiree is considering an optional retiree policy, a group policy from a professional body or alumni association, or a separate individual policy because they are no longer covered, making a decision about health insurance can be a critical part of their retirement planning.

To make an informed choice, it is important to understand what health insurance covers. Prescriptions, dental visits, paramedical services (massage, chiropractic, podiatry, etc.), and eyeglasses are commonly covered under group and individual plans. That said, there are often limits to annual and sometimes lifetime coverage, such that only so much money can be paid back by the insurer in return for your and other plan members’ premiums.

In Canada, some forms of insurance are more important than others. You need car insurance by law throughout the country. You need home insurance to get a mortgage, and most people would agree that even without a mortgage, home insurance is a must. If you have dependents who rely on you, life insurance to replace your income if you die is prudent. Whether you have dependents or not, disability insurance is crucial to replace your income if you cannot work and earn a living. Critical illness insurance, errors and omissions insurance (for my business), and other coverage may be appropriate in certain situations. I have each of these types of insurance myself.

Health insurance, however, is an optional type of insurance—and for many retirees it may be unnecessary. Let me explain why.

Health insurance costs vs. benefits

While this is an imperfect example, bear with me and imagine a game of chance. Someone is going to flip a coin and the only outcomes are heads or tails. The coin flip will happen only once, and you must wager $1. The only results will, therefore, be winning $1 or losing $1.

Now imagine an insurance company offers you an insurance policy that will replace your $1 if you lose. The cost is 20 cents. If you buy the policy, the only outcomes are winning 80 cents ($1 less the 20-cent insurance cost) or losing 20 cents (the 20-cent insurance cost to protect your potential $1 loss).

The best outcome is worse than if you had not purchased the policy (winning 80 cents instead of $1), but the worst outcome is not as bad (losing 20 cents instead of $1). The outcomes are less extreme, but your best-case scenario won’t put you further ahead than not buying the insurance in the first place.

Obviously, losing $1 will not make or break you, but having your home burn down or losing a family’s breadwinner may be devastating without insurance.

Once again, this coin toss example is not entirely fair, but it is helpful perspective. Health plans have limits, say, up to $500 per year of chiropractic sessions or $250 for prescription glasses every two years. Insurers will base their premiums on the likelihood of a policyholder making claims, as well as on the total benefits they are likely to pay out (which are capped), all the while ensuring (rightly so) a profit for them.

Over a 25-year retirement, if all retirees received more in benefits than they paid in premiums, the insurer would go bust. On that basis, the average retiree should come out ahead paying health costs out of their own pocket. One exception may be a retiree plan that is partially funded by an employer.

Emotional considerations

My mother had an individual health insurance plan. Every few years, as the premiums rose, she would ask whether she should renew. I would subtly encourage her to cancel the coverage, and she would stubbornly renew it each year.

She no doubt paid more in premiums than she ever got back. But it gave her more peace of mind to pay predictable monthly premiums and get some benefits back from the insurance company than to pay sporadic out-of-pocket expenses. There was a psychological benefit to having the policy for her, although the math was never in her favour.

When my mother developed a terminal illness, she required significant care, particularly in the last six months of her life. Her prescription drugs, most of her equipment, and even some or her caregiver costs were covered by the provincial government. That is not to say that someone else’s prescriptions, equipment, or nursing costs will be covered, but it is important to consider that some of the most significant retiree medical costs—such as personal support workers, nurses, and other caregivers—generally will not be covered by a supplementary health insurance plan either. Long-term care insurance is an option in this case, but that is a column for another day.

In summary, health insurance is an optional type of insurance. It’s a nice employee benefit and one that has become commonplace in Canada, with four out of five working Canadians and their families covered by health insurance plans, according to the Canadian Life and Health Insurance Association.

Should a retiree buy health insurance in retirement? I advised my own mother against it, and bless her soul, she did not listen to me. You don’t need to listen to me either, but I am sharing with you the advice I would (and did) give to my own mother when she was alive.

Updated on November 23, 2020

When you purchase a health insurance plan for yourself, you can get coverage that extends to your dependents; likewise, if you’re an employer covering your workers, you can provide coverage for any dependents they have. If you’re planning on purchasing a family health insurance plan to cover your dependents, it’s important to make sure you know they’re eligible to join your family health insurance plan before you make your final purchase.

Dependents for taxes & health insurance

According to healthcare.gov, if you can count someone as a dependent on your taxes, they’re also a dependent on your health insurance plan. What’s more, you are required to provide health insurance for anyone whom you claim as a tax dependent. So if you intend to include a child or other relative as a tax dependent, you should also make sure they’re included in your health insurance plan.

Requirements for adding your children as dependents

If you have children, they’re probably the first people that come to mind when talking about dependents. Generally speaking, you can include any child who fits the following criteria:

  • Age: Your child has to be under the age of 26.
  • Relationship to You: For a child to qualify as your dependent, he or she needs to be your biological child, your stepchild, your adopted child, or a foster child you are taking care of. If your child has other sisters, brothers, half sisters, half brothers, or children of their own, you can also include them on your health insurance plan.
  • Length of Residency: A child only qualifies as your dependent if they have lived with you for at least six months.
  • Income Contribution: Although your child can be your tax dependent while working and contributing to their own expenses, they cannot be their own primary source of support. This means a child’s income must be less than half of the cost of their support expenses to qualify as your dependent.
  • Tax Filing: A child cannot be your dependent if they file a joint tax return that year.
  • Other Claims: A child cannot be claimed as a dependent by more than one household. So, regardless of your relationship, if someone else claims your child as a dependent, you cannot.

What’s not required to add your children as dependents

Besides keeping track of what’s required to claim your child as a dependent, you should also remember what isn’t required to claim a child as a dependent:

  • Living with parents: Your child doesn’t have to be living with you at the time you enroll them in your health insurance plan, provided they’ve lived with you long enough to meet the residency requirement.
  • Marital status: your child is still eligible for coverage if he or she is married or has children.
  • Enrolled in school: it doesn’t matter if your child is enrolled or not enrolled in school.
  • Eligible for employer-based coverage: you can still add your child to your health plan even if they chose to not enroll in their employer’s health insurance plan.
  • Tax status: you can add your child to your plan even if you don’t claim them as a tax dependent.

As long as your children meet these other requirements, you can usually still include them in your coverage.

Adding your spouse as a dependent

In most cases, adding a spouse to your health insurance plan is acceptable. After getting married, you usually have up to 60 days to enroll in a new plan, or add your spouse as a dependent.

Keep in mind that if you or your spouse have access to employer-sponsored health insurance, but choose to buy your own family plan on a health insurance exchange, you likely will not qualify for Obamacare subsidies. Check out eHealth’s other resources to learn more about how health insurance works with marriage. If you have questions, you can also talk to one of eHealth’s licensed insurance agents to discuss coverage options that might fit your family’s needs.

Additional Dependents

Besides your child and spouse, you can include other relatives as dependents under certain conditions, namely:

  • If no one else has named them as a dependent
  • If their gross annual income is less than $3,000
  • If you are responsible for providing more than half of the financial support they rely on

In addition to relatives, you can include others who have lived in your house for at least a year, provided they meet all of the aforementioned criteria.

Can you add your parents to your health insurance?

While the Affordable Care Act mandates that children be eligible for coverage under their parents’ insurance till 26, there isn’t a similar protection for parents. Health plans typically count spouses and children as dependents, but generally don’t include parents. However, the rules vary by plan and location, so always double check with your plan.

If you’re interested in getting health coverage for your parents, contact your health plan to find out if you can add them to your plan. Your parents must, generally, be claimed as tax dependents.

If your health insurance won’t allow you to add your parents, you can enroll them in a separate health plan, either through the Marketplace or Medicare (if they’re 65 or older). If you have questions about their eligibility or would like help finding coverage for your parents, eHealth’s team of trusted health insurance experts can go over your options.

Coverage Considerations

Once you have named someone as your dependent, he or she will generally have access to the same plan or set of plans that you use. Depending on where you get your health insurance, he may also be able to choose among plans that you rely on, including the health plan, dental insurance, vision, or more.