Q. I’ve heard that policies in the exchange only charge for a maximum of three children on a family plan. Is this true?
A. It depends on the ages of your children. A family policy can include separate child premiums for up to a maximum of three children age 20 or younger. There is no charge for additional children who are aged 20 or younger. However, “adult children” aged 21 to 25 who are covered on a family plan are charged the adult rate, regardless of how many dependent children a family has.
Some examples help to show how this works:
Family A has seven insured members: two parents in their 50s and five children, ages 18, 16, 15, 13, and 11. Their total price will include premiums for the parents, plus premiums for the three oldest children, since all five children are 20 or younger (under the standard age rating curve, which is used in most states, premiums are the same for kids up to age 14, but start to increase after that, meaning that the oldest three kids in this family will all have slightly different premiums).
Family B also has seven insured members: two parents in their 50s and five children, ages 24, 21, 17, 15, and 13. This family’s premium will include charges for all seven family members. Adult rates will be charged for the parents and the two older children. Since rates vary based on age, the parents’ premiums will be higher than the children in their early 20s. And the three younger children will each be charged the applicable child rate. If this family had a sixth child who was under 20, premiums would not be calculated for that child, as they have already reached the maximum of three.
Note that all of this applies in both the individual/family market as well as the small group market, and also applies both on-exchange and off-exchange.
But for self-insured health plans and in the large group market, insurers and employers can set their own rating rules (although the original rules indicated that these rating rules would apply to large group plans as of 2017 if they were offered through the exchange, large group health plans never became available through the exchange in any state).
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.