Q. Is there a minimum age for the Affordable Care Act’s individual mandate? And who is responsible for paying the penalty if a child or young adult doesn’t have coverage?
A. There’s no age limit associated with the ACA’s individual mandate. Unless you have an exemption from the requirement to maintain coverage, all legally present U.S. residents are required to maintain health insurance coverage, including children and seniors.
There’s sometimes confusion when young adults are involved, since the law allows them to remain on their parents’ health plan – if that’s what the family wishes – until they turn 26. This applies regardless of whether the parents claim the young adult as a dependent on their tax return.
Young adults who remain on their parents’ health plan will qualify for a special enrollment period when they turn 26 and lose access to their parents’ plan. As long as they enroll in a new plan at that point and don’t have a gap in coverage of more than two months, they’ll be in compliance with the individual mandate, and won’t owe a penalty.
But if a young adult does not have health insurance and is not exempt from the individual mandate, the penalty is assessed by the IRS, and it applies to whomever’s tax return the uninsured person is on. It doesn’t matter how old the child is, or whether or not she’s eligible to be covered under her parents’ plan.
If her parents claim her as a dependent and she’s uninsured, the penalty applies to the parents’ tax return. (The flat-rate penalty is at the adult rate for dependents 18 or older, and half that amount for younger dependents.)
On the other hand, if the young adult files her own tax returns, the penalty would be assessed on her return, regardless of whether she would have been eligible to have coverage under her parents’ health plan.