Turning 26 can be an exciting yet challenging milestone. As you transition into adulthood, one important consideration is health insurance coverage. The Affordable Care Act (ACA) allows young adults to remain on a parent’s health insurance plan until they turn 26 years old. This provision provides an invaluable opportunity to maintain health benefits as you navigate early adulthood.
Here is a comprehensive guide on staying covered under your parent’s policy, when and how coverage ends, and your options once you do age off the plan.
Who Is Eligible to Stay on a Parent’s Plan Until 26
You can stay enrolled under your parent’s health insurance until December 31st of the year you turn 26 if their plan is through the ACA’s health insurance marketplace. For employer-sponsored plans, you typically lose eligibility the last day of the month you turn 26.
Importantly, you can remain covered even if you:
- Get married
- Have or adopt children
- Attend school
- Live on your own
- Are financially independent
- Turn down an offer of coverage through your job
The only factor determining eligibility is your age.
States Allowing Coverage Past Age 26
A handful of states allow dependents to stay on a parent’s plan past 26 years old:
- Florida: Eligible until age 30
- Illinois: Eligible until age 30
- Nebraska: Eligible until age 30
- New Jersey: Eligible until age 31
- New York: Eligible until age 30
- Pennsylvania: Eligible until age 30
- South Dakota: No age limit
- Wisconsin: Eligible until age 27
Eligibility criteria, such as being a student or unmarried, varies by state. Contact your parent’s insurer for specifics.
Special Enrollment Period After Losing Coverage
Losing coverage under your parent’s policy triggers a 60-day special enrollment period (SEP) to enroll in a new plan without a gap in coverage.
You have 60 days before and after you age off the plan to sign up for:
- An ACA marketplace plan
- Medicaid or CHIP (if income-eligible)
- An employer-sponsored health plan
This ensures you can seamlessly transition to a new policy.
Health Insurance Options at Age 26
You have several options for new health coverage once you lose eligibility under your parent’s policy:
Employer-Sponsored Insurance
If your job offers health benefits, this will likely be the most affordable route. Many employers cover a significant portion of monthly premiums for their workers. Compare plan details to choose the best option for your needs and budget.
ACA Marketplace Plan
You can shop for health insurance policies on Healthcare.gov or your state’s marketplace. Based on your income, you may qualify for premium tax credits and cost-sharing reductions to lower your overall costs. Make sure to enroll during your special enrollment period to avoid a coverage lapse.
Medicaid
If your income falls below a certain level, you may be eligible for Medicaid depending on whether your state expanded coverage under the ACA. Visit Healthcare.gov to check if you qualify and apply.
COBRA
You can possibly stay on your parent’s health plan via COBRA continuation coverage. But you’ll have to pay the full premium cost plus a 2% administrative fee, which is often expensive. Weigh this option carefully against other policies.
Turning 26 Mid-Year
Your parent’s type of insurance impacts exactly when you lose coverage:
- Employer plan: Coverage ends the last day of the month you turn 26.
- ACA marketplace plan: Coverage ends December 31st of the year you turn 26.
So if your birthday is June 15th and your parent has a marketplace plan, you could remain covered until December 31st of that year.
Make sure you understand the termination date for your existing policy so you can seamlessly transition to a new health plan.
Weighing the Pros and Cons of Staying Covered
Staying on your parent’s health insurance is convenient and often affordable with low or no monthly premium contributions. But there are some drawbacks to consider:
Pros
- Lower premium costs
- Continuity of care and provider networks
- Coverage for pre-existing conditions
Cons
- Out-of-state coverage limitations
- Changing eligibility with life events like marriage or a new baby
- Possible gaps in maternity care coverage
Carefully weigh the pros and cons based on your health needs and personal situation. This will clarify the best route for insurance coverage.
Preparing to Transition Off Your Parent’s Plan
As you approach age 26, take proactive steps to ensure continuous health benefits:
- Research options 60-90 days beforehand
- Compare plans and coverage details
- Check subsidy eligibility through Healthcare.gov
- Enroll in a new plan during your special enrollment period
- Consider COBRA to temporarily continue current coverage
With some advance planning, you can secure new health insurance with ample time to spare.
Turning 26 and losing eligibility under your parent’s policy may feel daunting. But you have an array of options to avoid being uninsured. Compare all available health plans with your specific needs and budget in mind. And leverage financial assistance if eligible.
With the right policy in place on your 26th birthday, you can step confidently into adulthood knowing your healthcare needs will be covered.