What to Do if You Can't Stay on Parents' Health Insurance
The Affordable Care Act (ACA) mandates that all health insurance providers, in states where coverage is offered, must allow a dependent to remain on a parent's plan until 26 years of age. However, in some states, there are health insurance riders that allow young adults to extend coverage under their parent's policy. If you do decide to get your own health insurance after 26, then there are several options available including employer coverage, marketplace policies and federally funded programs like Medicaid.
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How long can I stay on my parent's health insurance?
If you are under 26 years old, then you are eligible to remain covered under your parent's health insurance plan. This is allowed even if you:
- Have started or finished school
- Get married
- Adopt or have a child
- Deny your employer-sponsored health insurance coverage
- Are no longer claimed as a tax dependent
The law, created under the Affordable Care Act (ACA), was established to assist young adults who do not have access to their own employer-sponsored health care in getting qualified coverage.
When will I need to choose a new health insurance policy?
When you will need to choose a new health insurance policy depends on the type of health insurance that your parents have. If your parents have a marketplace health insurance policy, then you will be allowed until the end of the year to enroll in a policy even if you turn 26 midyear. This would require you to submit your own marketplace health insurance application and be aware of the open enrollment dates in your state.
If you were previously covered by your parent's employer policy, then you will have until the end of the month that you turn 26 years old to choose a new health insurance plan. Furthermore, losing your parent's employer-sponsored health insurance coverage will open a special enrollment period (SEP) during which you can buy your own health insurance. Your SEP begins 60 days before and continues 60 days after you lose coverage. During this time you are allowed special access to your state health insurance marketplace and can decide what coverage you would like to purchase.
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What is the age 29 health insurance rider?
New York state allows young adults under the age of 29 years old to acquire a health insurance rider that extends their eligibility to stay on a parent's policy. In order to receive the extension, you would need to apply during the open enrollment period between the ages of 26 and 29 years old. You may be eligible for the age 29 health insurance rider if you live in New York and are:
- Not married
- Not currently eligible for employer-sponsored health coverage
- Under 29 years old
Fortunately, New York is not the only state that provides young adults with an extension for health insurance coverage. Many states, like New Jersey, have programs that can even allow someone to remain covered under a parent's plan until 31 years old if they are eligible. Below, we have provided information for the six states that currently have health insurance riders that provide an extension of coverage.
State | Eligibility requirement | Can stay on health insurance until age |
|---|---|---|
| Florida |
| 30 |
| Nebraska |
| 30 |
| New Jersey |
| 31 |
| New York |
| 30 |
| Pennsylvania |
| 30 |
| Wisconsin |
| 27 |
Health insurance options for turning-26-year-olds
If you find yourself aging out of your parent's health insurance policy, you have a few coverage options to choose from:
- Employer-offered coverage: If you have a full-time job, then you may be offered a company health insurance policy through your employer.
- School-based coverage: If you are attending a university, then the school may offer its own health insurance policy to full-time students. This can be an affordable option for many graduate school students who may be getting older and aging out of their parents' policies.
- Individual health insurance: If you do not have access to health insurance through work or school, then you can still get affordable coverage through your state health insurance marketplace. Furthermore, you may be within an income threshold to be eligible for premium tax credits.
- Medicaid or the Children's Health Insurance Program (CHIP): When applying through your state health insurance marketplace, you will be asked about your income. Depending on your income level, you may be eligible to enroll in your state's Medicaid program.
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What is the best marketplace health insurance for 26-year-olds?
When searching your state health insurance marketplace, you should carefully evaluate the monthly premium and deductible of each plan, as these will directly affect what you will pay for coverage. You will notice that marketplace policies are broken down by tier. Below, we have provided explanations for each tier and when each is the best option. For many young, healthy adults, there are certain plans that will adequately provide health insurance coverage at a cheaper monthly premium.
Gold and Platinum
The most expensive policies on state marketplaces are Gold and Platinum. However, these plans have the lowest deductibles, which allow you to access coinsurance benefits more quickly.
Twenty-six-year-olds, who are often in great health, will find that this type of policy likely ends up costing more compared to the benefits that they receive. For this reason, we would not recommend getting one of these policies unless you have an illness that requires monthly prescription drug refills, which can be costly. For example, people with diabetes who require monthly insulin refills may find that a Gold health insurance policy will save them money.
Silver
Silver health insurance policies have average premiums, deductibles and out-of-pocket maximums. These policies are more expensive than the cheapest available but are a great option for individuals in their late 20s who may be starting a family. New families may find that they have an increase in health costs for their kids. The lower deductible of a Silver policy can provide quicker access to coinsurance benefits.
Additionally, a Silver plan offers cost-sharing reductions if your income falls below 250% of the federal poverty level. This can provide valuable benefits for young adults who may not be earning a large income.
Catastrophic and Bronze
Catastrophic and Bronze health insurance plans are the cheapest health policies offered on state health insurance exchanges but have the highest deductibles and out-of-pocket maximums. Cheap plans like these are ideal for healthy individuals in their 20s who do not expect to have significantly high medical costs. However, we would not recommend this type of policy if you are currently responsible for dependents or have large, recurring medical expenses.