Financial tips for dependent adult children with sleep disorders

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Almost 26 or older? Extended health insurance coverage may be available

woman holding a 26th birthday card that says Happy Health Care Birthday with balloons marked 26If you or your young adult child is 25 years old, then you will need to make health insurance decisions before age 26. The Affordable Care Act (ACA) only requires health insurers to cover a dependent on a parent’s plan until the age of 26. However, some insurance plans allow young adults with a disability (such as the diagnosis of idiopathic hypersomnia, narcolepsy type 1 or 2, or Kleine-Levin syndrome) to extend coverage under their parents’ insurance plans—often for up to 5 years each time a request is made. To find out whether your plan does this, you need to discuss your plan with an associate at your insurance company, your human resource personnel, or a representative in the office of your state’s insurance commission.

It is also possible that an insurance plan may allow a disabled young adult to be reinstated on their parents’ health plan if their disability began before a certain age, such as 26 or 18. Therefore, you should look into this extended health insurance option even for young adults already over the age of 26.

If you are an employee (or retiree) of the Commonwealth of Massachusetts, please contact retired Hypersomnia Foundation (HF) Board Member Mary King () for information about this option under the UniCare State Indemnity Plan. Mary also would like to hear from you if your health insurance plan provides this option. HF can then post that information for the benefit of others. Finally, if you work in the health insurance industry, please contact Mary King to share your knowledge of this extended insurance option.

The little known Social Security disability benefit for disabled adult children

young girl asleep at her desk on top of a pile of booksAuthored by Anjel Burgess, Esq.

The Social Security Administration offers disability benefits through 2 traditional programs: 

  • Supplemental Security Income (SSI) benefits are payable to disabled people, regardless of age, who meet certain income and asset requirements. SSI benefits include a monthly payment of up to $914 (2023 maximum for individuals) as well as Medicaid health insurance.
  • Social Security Disability Insurance (SSDI) benefits (also called Disability Insurance Benefits, or DIB) are payable to adults who have worked and paid enough into Social Security to be insured for disability purposes. SSDI benefits include a monthly payment that varies depending on the adult’s average lifetime earnings and can range up to $3627 (2023 maximum). Medicare insurance (rather than Medicaid) is also included with SSDI benefits.

However, there is also a third SSA disability program, which provides benefits to a disabled adult child (DAC*) based solely on the work record of their retired parent. These benefits include:

  • A monthly payment of up to one-half of the retiree parent’s full retirement benefit, which will not lower the parent’s own retirement benefit
  • Medicare health insurance, which begins after a 24-month waiting period from the date the DAC was first eligible for these benefits 

In order to qualify for DAC benefits, the adult child must meet the following criteria:

  • Unmarried
  • Age 18 or older
  • Have a documented disability that began prior to age 22
  • Must not have any substantial earnings through their own work history during the time frame that they wish to qualify for DAC benefits

Below are 3 different example situations for retiring parent Johnny and his son Michael, who is single and has had debilitating idiopathic hypersomnia since age 20.

Example 1: Johnny starts collecting Social Security retirement benefits at age 66. Michael is 24 now and has never worked, but he can start collecting DAC benefits based on his father’s Social Security record.

Example 2: Johnny has just celebrated his 62nd birthday and has decided to retire early. Since age 21, his son Michael has been receiving SSI benefits, including Medicaid. Michael is notified by SSA that his father’s early retirement has entitled Michael to benefits as a DAC. Michael’s SSI benefit will be replaced with a higher monthly DAC benefit. Also, after the 24-month waiting period, Michael will get Medicare instead of Medicaid.

Example 3: Johnny is 60 years old and still working. His son Michael has also been working— part-time at a grocery store making $450 per month since he was 18 years old. Michael has no assets. Michael is not currently eligible for benefits under the DAC program, but he may be eligible for benefits under both the traditional SSI and SSDI programs. When Johnny turns 62 and decides to retire early, Michael may still be able to benefit from the DAC program if he will get a higher monthly payment under Johnny’s Social Security record.

A parent’s decision about when to retire and start drawing their SSA retirement benefits may be influenced by the knowledge that, upon the parent’s retirement, their disabled adult child may be eligible to receive their own disability benefits and Medicare coverage from the SSA. DAC benefits are also available if the parent is deceased or disabled. 

* Also known as Childhood Disability Benefits (CDB)

Anjel F. Burgess, Esq, is a Partner in the law firm of Burgess & Christensen, which specializes in helping people with disabilities to obtain disability benefits from the Social Security Administration.

For more information on DAC/CDB benefits, please contact your local Social Security office or a qualified Social Security disability attorney.

Published May. 30, 2023 |
Revised Jan. 22, 2024