My guess is that the government is making this sh!t up as they go along. They don’t know what is in the law, probably won’t because they’ve likely just started bluffing.
If it was me, I’d make whoever said I can’t drop my out-of-home working child under 26 (but over the legal dependency age) quote to me EXACTLY, chapter and verse, where the LAW actually says this. If they spout something, I’d tell them to give that to me in writing on their letterhead as an established policy.
It’s all over 0bamacare - “at the secretary’s discretion” etc.
Further, if it is what you assume as the insurance company ‘trying to play it safe’, ask them will they assume 100% coverage for the child even though they may be covered by another policy. Will they forego subrogating any claims to the other company? Will they give this guarantee in writing? If not, will they reduce the policy because they aren’t giving ‘full-coverage’ insurance?