Family Size Insurance: Who Qualifies?

The size of a family can impact insurance costs, particularly when it comes to health insurance. The number of people on a health insurance plan affects the monthly payment, as each person covered by the plan is charged for. However, it's important to note that the cost is not solely dependent on family size, as a healthy family of six could spend less than a married couple with chronic conditions. When it comes to defining a household for insurance purposes, it typically includes the tax filer, their spouse, and their tax dependents. This can include dependent children, foster children, unmarried dependent children living away from home, and relatives who live in the home all year and receive more than 50% of their support from the tax filer. It's worth noting that a household member doesn't always have to live with the policyholder, and homeowners insurance policies may not cover non-relative residents.

Family size impacts insurance costs

The age of family members also influences insurance costs. The older the family members, especially the primary policyholder, the higher the premiums tend to be. The eldest member's age plays a crucial role in determining the premium for family insurance policies.

The type of insurance plan chosen also impacts the overall cost. More comprehensive plans with additional benefits, such as dental or vision coverage, generally come at a higher price. Basic plans tend to have lower premiums but may result in higher out-of-pocket expenses when medical care is needed.

Additionally, the geographical location can influence insurance costs. Health insurance costs can vary from state to state or region to region due to differences in the cost of living, state regulations, and competition among insurers.

It is worth noting that family size does not always determine the amount spent on healthcare. A healthy family of six may spend less on medical expenses than a married couple with chronic health conditions. However, when it comes to health insurance costs, the number of people on the plan does impact the overall price.

When considering insurance options, it is essential to evaluate the specific healthcare needs and budgetary constraints of the family to choose a plan that offers adequate coverage at a manageable cost.

Who counts as a household member?

The definition of a household member can vary depending on the type of insurance and the insurance company. Here is a detailed breakdown of who counts as a household member for different types of insurance:

Health Insurance

For health insurance, a household usually includes the taxpayer, their spouse (if any), and their tax dependents. This typically includes dependent children, including adopted and foster children, as well as children under 21 years of age that you take care of, even if they are not your tax dependents. If you share custody of a child, include them only during the years you claim them as tax dependents. If you have a non-dependent child under 26 years old, include them only if you want to cover them under your health insurance plan.

Your legally married spouse, whether of the opposite or same sex, should be included in your household. However, do not include a legally separated or former spouse, even if you live together. If you are a victim of domestic abuse, domestic violence, or spousal abandonment, you do not have to include your spouse.

Unmarried domestic partners should be included only if you have a child together or if you plan to claim them as a tax dependent.

Do not include people you just live with unless they are your spouse, tax dependent, or fall under another exception.

Car Insurance

For car insurance, a household member typically includes immediate or extended family members living with you, as well as non-family members who drive your vehicle, such as a roommate. This can include your spouse, partner, or significant other, children with driver's licenses, and other family members who live with you, such as parents, uncles, aunts, or cousins.

Insurance companies may also consider unmarried dependent children temporarily away from home for college as household members if they intend to live in the household during breaks and use their parent's home address as their permanent address.

It is important to inform your car insurance provider of all household members, as not disclosing a household member can be considered insurance fraud. You can choose to exclude certain household members from your policy if they will not be driving your vehicle, but the insurance company still needs to be made aware of their existence.

Medicaid and CHIP

For Medicaid and the Children's Health Insurance Program (CHIP), the definition of a household and the rules for determining household size can vary. Household size is determined based on an individual's family and tax relationships, as well as their living arrangements. For tax filers, the household includes the tax filer, their spouse filing jointly, and anyone claimed as a tax dependent. For tax dependents, the household is generally the same as the tax filer claiming them, with some exceptions for individuals under 19 years old.

It is important to note that the definitions provided above may not cover all possible scenarios, and insurance companies may have different underwriting rules, guidelines, and policies. Therefore, it is always best to consult with your specific insurance provider to clarify who is considered a household member for your particular insurance plan.

How to determine household size for Medicaid

The Medicaid household definition is important to understand when determining eligibility for the program. Medicaid provides essential medical benefits to low-income Americans who meet strict eligibility requirements. To qualify, applicants must not exceed the income limits set for their household by their state of residence.

The Medicaid household typically consists of the applicant, their spouse, and any dependents who are required to file tax returns. The number of members in a household is sometimes referred to as family size.

When applying for benefits, the following individuals should be included in the Medicaid household:

• Spouse: If legally married, the spouse must be included in the Medicaid household. This applies to legal same-sex unions and legal spouses who reside at a different address.
• Unmarried domestic partner: If the applicant claims their unmarried partner as a dependent on their tax return or they live and raise children together, they should generally include them as part of their household.
• Dependent children: Any dependent children who live with the applicant, including adopted or foster children, are considered part of the Medicaid household. If the applicant shares custody of dependent children with their spouse, they should only include them in their household if they declare them on their tax return.
• Other children the applicant currently cares for: If the applicant cares for children under the age of 21 who live in their home, they may be included as part of the household even if they don’t declare them on their taxes.
• Dependent parents and adult siblings: If the applicant claims their parents or adult siblings as dependents when they file their tax return, they may include them in their household.
• Other dependent relatives: Grandparents, aunts, uncles, and other relatives may be included in the applicant's household if they provide financial support and count them as dependents when filing tax returns.

It is important to note that the Medicaid household definition may vary by state, so it is recommended to review state-specific guidelines before applying for benefits. Additionally, individuals who are not considered part of the applicant's Medicaid household typically include long-term house guests, legally separated or divorced spouses, boyfriends or girlfriends who aren't tax dependents (unless they have children together), and shared-custody children who are claimed as dependents by an ex-spouse.

Home insurance and family members

When it comes to health insurance, the size of your family does have an impact on cost. While the number of people on a plan affects the monthly payment, the size of your family does not necessarily determine what you spend on doctors and prescriptions. For example, a healthy family of six could spend less than a married couple with chronic conditions. When you add a spouse or child to a plan, your monthly payment goes up as you are charged for each person covered by the plan.

In the context of health insurance, a household usually includes the tax filer, their spouse if they have one, and their tax dependents. This can include dependent children, including adopted and foster children, as well as children under 21 you take care of, even if they are not your tax dependents. It is important to note that if you share custody of children, you should only include them during the years you claim them as tax dependents.

Now, let's discuss home insurance and how it relates to family members. Home insurance, also known as property insurance, typically covers the policyholder's home and its contents against damage or theft. It is important to note that home insurance policies can vary, and it is essential to carefully review the specific coverage provided by your chosen insurance company. Some standard aspects of home insurance include:

• Building insurance: This covers the physical structure of your home, including the garage, shed, and fence, against events such as fire, flood, storm, theft, and malicious damage.
• Contents insurance: This covers your personal belongings within the home, such as clothes, jewellery, furniture, and appliances, in case of damage or theft.
• Liability coverage: This provides protection if someone is injured or their property is damaged while on your premises.
• Temporary accommodation: If your home becomes uninhabitable due to a covered event, your insurance may provide temporary accommodation for you and your family.

In the context of home insurance, family members are typically considered additional insured individuals under the policy. This means that they are covered by the policy in case of any insured events, such as damage to their belongings or liability claims. However, it is important to review your specific policy to understand the extent of coverage for family members. Additionally, if you want a family member to be able to make changes to your home insurance policy, you may need to list them as a nominated representative by contacting your insurance provider.

How family changes can affect insurance

Family changes can have a significant impact on insurance, and it's important to be aware of how your coverage may be affected by life's transitions. Here are some common ways that family changes can influence your insurance:

Marriage and Divorce

When you get married, you may want to add your spouse to your existing health insurance plan or vice versa. Marriage is considered a Qualifying Life Event (QLE), which triggers a Special Enrollment Period. During this period, you can make changes to your health insurance plan, such as enrolling in a new family health plan, adding your spouse to your current plan, or joining your spouse's plan. It's worth noting that spouses do not have to be on the same plan, and separate policies may sometimes be the best option. Additionally, if you are covered under your parent's health insurance plan, you can remain on that plan until you turn 26, even if you get married before that age.

On the other hand, divorce is also a QLE. Following a divorce, you may need to remove your former spouse from your health insurance plan or make changes to your coverage to ensure you still have adequate protection.

Having Children

Having or adopting a child is another QLE that will impact your insurance needs and costs. You will need to provide insurance coverage for your child, so it's essential to explore your options and make the necessary adjustments to your plan.

Children Leaving for College

If your child is heading off to college, there are insurance implications to consider. Your homeowner's insurance may extend to cover their possessions in a dormitory, as it is considered a temporary residence. However, if your child lives in off-campus accommodation, they may need a separate renter's insurance policy. Additionally, taking a vehicle to college could alter your auto insurance rates, depending on the location of the institution.

Elderly Relatives Moving In

When an elderly relative moves into your home, you may need to make modifications to your home to accommodate their needs, such as installing grab bars or ramps. It's important to adjust your homeowner's insurance policy to account for these changes and ensure adequate coverage for any rising liability risks and valuable possessions your relative may bring.

Death in the Family

The death of a family member is a QLE that can impact your insurance needs. While you will no longer need to provide coverage for the deceased, you will also lose their income, which may affect your ability to pay for insurance coverage.

Frequently asked questions