How Long Can You Stay on Your Parents' Health Insurance?
Under U.S. law due to the Affordable Care Act (ACA), if your parents’ insurance plan covers dependents, you can stay on or be added to your parents’ insurance during Open Enrollment up until your 26th birthday.
What Factors Don’t Affect Coverage?
You can remain on your parent’s insurance even if you:
- Move out of your parents house
- Attend or leave college
- Get married
- Have or adopt a child
- Become financially independent
- Are eligible for health insurance through an employer
Once you turn 26 years old, you lose your health insurance coverage through your parents’ health insurance and must enroll in your own health plan. Generally, if your parents coverage is through a job-based plan, your insurance should end on your 26th birthday.
It is a good idea to check in with the employer or insurance carrier since some plans and states have differing rules. For example, according to healthcare.gov, “If you’re on a parent’s Marketplace plan, you can remain covered through December 31 of the year you turn 26 (or the age permitted in your state).”
How Can Which State You Live in Affect the Age You Lose Coverage?
Even though federal law dictates that you can remain on your parents’ insurance until your 26th birthday, some states have rules that extend your coverage.
New York state allows those under 30 years old to acquire a health insurance rider, which will extend their eligibility to stay on a parent's policy. To receive the extension, apply during the open enrollment period between the ages of 26 and 29 years old. To be eligible, you must also be unmarried and not currently eligible for employer employer health coverage.
Fortunately, five other states offer programs that extend young adults’ coverage through their parents health insurance. Florida will cover until an individual is 30 years old as well, as long as he/she is unmarried and has no dependent children.
New Jersey offers a program that allows you to stay on until you are 31 years old. The requirements for this include being unmarried, a state resident and a full-time student. Nebraska has the same requirements, but only covers until your 30th birthday.
Pennsylvania has the most requirements to stay insured, which include being unmarried, a state resident, a full-time student and permission from the policyholder. Wisconsin only extends until your 27th birthday. To be eligible for this extension of coverage in Wisconsin, you must be unmarried and have no health insurance offering through an employer.
When you do lose your insurance, you qualify for a Special Enrollment Period.
What’s the Special Enrollment Period?
Normally, you can only sign up for new health insurance during the Open Enrollment Period each year. 2020’s Marketplace enrollment was from November 1st through December 15th in most states.
A Special Enrollment Period is a period outside of the yearly Open Enrollment Period during which you can sign up for health insurance.
Regardless of when your parents’ plan ends your coverage, you'll have a 120-day special enrollment window in which to buy a new health insurance policy on the marketplace for ACA plans. During this time, which begins 60 days before you turn 26 and ends 60 days after, you can purchase a new medical plan. If you are buying an individual plan that is not on the ACA marketplace, you have 30 days after you turn 26.
Insurance plans through employers must provide a Special Enrollment Period that lasts at least 30 days.
What Options Does a 26-Year-Old Have for Getting Health Insurance?
Having to decide which insurance plan to go with for the first time at 26-years-old can be a very daunting task. There are many different types of insurance plans that may be available to you:
1. Job-based coverage: If you’re fortunate enough to be a full-time employee (or even part-time, depending on the employer), you might be eligible for health insurance through your job.
2. School-based coverage: Some colleges offer affordable health insurance plans to full-time students. Many will simply add a reasonable fee to your total tuition amount.
3. Medicaid: If you cannot obtain insurance through your work or university, the other options are through Medicaid via HealthCare.gov or the Marketplace within your state. When signing up for health insurance, you’ll be informed if you qualify for Medicaid which is low to no cost health insurance for lower-income Americans.
4. Marketplace coverage: If you do not qualify for Medicaid, you will need to shop plans through your state’s Marketplace. It is possible that you may even qualify for subsidies that will make the financial burden of health insurance a little more affordable.
Which Marketplace option is beneficial for a 20-something-year-old?
Catastrophic plan: This option is available only to those under age 30 and who are not as likely to have health issues. If you are healthy and will probably not spend much on healthcare, you would have higher deductibles, which is the amount required for you to pay out-of-pocket for emergency visits, doctor appointments, medicines, and testing before insurance covers costs. However, this means you would have lower premiums that you pay monthly to keep your health insurance active.
Bronze plan: Much like the Catastrophic plan, this plan includes low premiums and high deductibles. However, you can apply subsidies, if you qualify, in order to lower your monthly cost. The Catastrophic plan does not allow for subsidies to be applied.
Gold plan: Age is not always an indicator of health. If you have a chronic condition or health issues that require a lot more health care, a Gold or Silver plan may be a more beneficial choice for you. The monthly premiums are higher, but the deductibles for out-of-pocket costs are much lower, which helps if you need to see the doctor frequently or require daily medication.
Silver plan: This is very similar to the Gold plan with a few less benefits and usually costs less than a Gold plan. Unlike the Gold plan though, if you qualify for a cost-sharing reduction, that can be applied and result in a reduced deductible.
Shopping for different coverage plans can be overwhelming. We’re here to help! If you want to compare health insurance rates, you can do so by entering your zip code and filling out a brief form for free.
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