While there are a couple of exceptions, generally speaking, you can remain on your parent’s health insurance plan until you turn 26. This rule applies to other types of insurance.
Once an individual attains the age of 26, he or she is eligible to obtain health insurance on his or her own through various sources, including an employer, government programs like Medicaid, or the Affordable Care Act (ACA) marketplace.
But as a result of the earlier mentioned expectations, this can be a complicated subject, especially when figuring out your best options.
So, I will walk through what you need to know about your insurance options, how to choose the right plan, and whether you need insurance in the first place.
Note: For the purpose of this article, our primary focus will be on health insurance.
Can You Stay on Your Parents’ Insurance After Age 26? What You Should Know
#1. Understand the “Aging-Up” Rule
By age 26, most states require adults to obtain their own insurance. However, a couple of states allow young adults aged 26 to apply to remain on their parent’s health insurance plan. As of the time of writing this article, these states included Florida, Illinois, Nebraska, New Jersey, New York, Pennsylvania, South Dakota, and Wisconsin.
#2. Determine Your Insurance Requirements
Start thinking about your health needs after the age of 25. For instance, you may believe you are in good health and only require medical insurance to cover unexpected medical expenses.
However, health insurance alone is insufficient. You should also consider the benefits of dental and vision insurance. You probably took good care of your teeth and eyes as a child. As you age, you want to keep them healthy. Ignoring dental and vision needs can lead to future health problems requiring costly (and often invasive) care.
#3. Examine Your Insurance Options
There are numerous medical, dental, and vision insurance options available. If you have a job, inquire about insurance benefits.
If you are not eligible for employer-sponsored benefits at work, you can obtain medical coverage through the ACA Health Insurance Marketplace. However, you should buy an individual dental and vision plan from a reputable carrier, such as Ameritas, to get the most bang for your buck.
Individual plans purchased directly from an online insurance company typically provide significant savings in out-of-pocket dental and vision care costs.
Dental insurance is valuable because of the cost savings it provides. If you don’t have dental insurance, you’ll have to pay for your dental care. People who have dental insurance tend to use it, scheduling regular preventive checkups to ensure the health of their teeth and gums. The dentist will examine your teeth for signs of disease and health concerns that could indicate an underlying medical condition.
Every year, most individual dental plans cover a preventive exam, professional cleaning, and bitewing X-rays. To a certain extent, insurance also covers fillings. More involved procedures, such as a crown or root canal, may have a waiting period before they are covered.
Vision insurance is an investment in your long-term health and well-being. You most likely spend hours each day looking at digital screens, from smart TVs and smartphones to computers and gaming consoles. Increased screen time can result in digital eye strain, which can cause vision discomfort and pain. Because of the constant demand for your vision, it is critical to have regular eye exams.
Individual vision plans typically include coverage for an annual exam as well as benefits to assist with the cost of materials such as eyeglasses or contacts.
People with vision insurance are more likely to schedule regular eye exams. The eye doctor will look for changes in your vision during these appointments to ensure your eyes are healthy and you can see well. The doctor will also examine your eyes for signs of potential medical issues, such as diabetes, which could hurt your overall health if left untreated.
#4. Purchase Insurance Protection
Find out when you can get coverage before the age of 26 if you are eligible for employer-sponsored insurance benefits. If your parents are covered by their job, you will most likely need insurance by the end of the month you turn 26.
Examine the plan requirements before purchasing medical insurance through the ACA Health Insurance Marketplace. If your parents have Marketplace insurance, you can stay on it until the end of the year, when you turn 26.
How Long Can You Remain on Your Parent’s Health Insurance?
According to the Affordable Care Act (ACA), young adults can remain on their parent’s health insurance policy until age 26. In most cases, you can continue to be covered by your parent’s health insurance plan even if you:
- Obtain a marriage licence.
- Have a child or adopt a child
- Start or drop out of school
- Live somewhere else
- Your parents do not claim you as a tax dependent.
Depending on your parent’s health insurance, you may lose coverage when you reach the age of 26, at the end of the month, or at the end of the calendar year. If your parents have employer-provided health insurance, you may be removed as a dependent on your 26th birthday (depending on the state and plan).
You will not lose coverage immediately if your parent has coverage through the ACA marketplace. You can stay on your parent’s ACA health insurance plan until December 31 of the year you turn 26. That means that if you turn 26 in the middle of the year, you will be covered until the end of the year.
How Can I Continue to Use My Parents’ Health Insurance Until I Turn 30?
Some states, such as New York and Florida, allow young adults to remain on their parents’ health insurance plans until age 30. In addition, many states allow disabled dependents to remain on their parent’s health insurance plan indefinitely.
Each state has its own requirements for children over the age of 26 who want to continue to be covered by their parent’s health insurance. The states that allow dependent children to remain on their parent’s health insurance after the age of 26 are listed below.
States where you can remain on your parent’s insurance until the age of 26:
- New Jersey
- New York
- Rhode Island
- South Carolina
- South Dakota
What to Do When You’re 25 and Still on Your Parents’ Health Insurance
You should have a backup insurance plan if you turn 26 during the coverage year. When you reach the age of 26, you will no longer be eligible for your parents’ insurance and will need to find a new plan. Let’s take a look at a practical imaginary situation:
Don is 25 and will turn 26 on April 15th, 2025. His father’s open enrollment period begins on June 1st, 2024, so he can still sign up for coverage through his parents. The next coverage year begins on January 1, 2025, and ends on December 31, 2025. This means he can continue to use his father’s plan for the first four months of the coverage cycle, but he will no longer be eligible after April 15, 2025.
For context, unless you have a qualifying event, you can only sign up for an insurance plan during a specific time of year known as open enrollment.10 Fortunately, Alex can sign up for new insurance coverage outside the typical open enrollment period because no longer qualifying for a parent’s insurance plan is considered a qualifying event.
Is Health Insurance Necessary?
If you are in good health, you may believe you do not require health insurance.
However, accidents happen all the time, and healthcare services can be expensive without insurance.
According to the Centres for Medicare and Medicaid Services, the average hospital stay in the United States can cost $10,000 per day.
While that is an extreme case, injury and illness can occur unexpectedly, and enrolling in health insurance is one simple way to help avoid high medical bills if an issue does arise.
It’s always a good idea to plan beforehand; you’ll be glad you did.
Health Insurance Options for Young People
You have a few options if you have reached retirement age and need to find new health insurance.
#1. Employer-Sponsored Health Insurance
Some companies provide group health insurance to their employees. The employer selects the plan and often pays a portion of your premium in a group plan. Some group plans may restrict the doctors and hospitals from which you can seek services, and you may not be able to keep the same coverage if you change jobs.
#2. The Health Insurance Marketplace
The marketplace offers health insurance to people who do not have health insurance through their employer. Many participants in the marketplace receive subsidies that reduce their premiums. You can research and purchase marketplace coverage through HealthCare.gov or your state’s marketplace. Marketplaces allow you to apply during “open enrollment” periods, which usually last from November 1 to January 15.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees with employer-provided health insurance to keep their coverage. COBRA coverage is only available in a qualifying event, such as job loss, reduction in work hours, the policyholder’s death, or divorce from the policyholder. The ACA also requires that COBRA coverage be extended to dependent children until they reach the age of 26.7. Although COBRA can help you bridge the gap if you lose coverage, you must often pay the entire premium out of pocket.8
Medicaid is a health insurance program that the federal and state governments offer to low-income adults, elderly adults, people with disabilities, children, and pregnant women. States administer Medicaid in accordance with federal guidelines. Medicaid eligibility is determined by your modified adjusted gross income. To qualify, you must be a U.S. citizen or have a qualifying non-citizen status, such as permanent residency. You must typically be a resident of the state in which you apply for Medicaid.9
#5. School-Sponsored Health Insurance
Many colleges and universities provide students with health insurance policies. A school-based plan could cost around $1,600 for one semester and $4,200 for the entire year. Copayments for office visits can range from $30 to $150 for emergency room visits. Check with your school to see what its plan includes.10
Selecting an Insurance Policy
Before you shop for your first health insurance policy, it’s critical to understand the different types of plans available, the level of coverage you can expect, and the associated costs. Some of the most common types of health insurance plans are listed below.
#1. EPO (Exclusive Provider Organisation)
Except in the case of an emergency, an EPO will only cover costs if you seek the services of doctors, hospitals, and services within the defined network.
#2. HMO (Health Maintenance Organization)
HMOs enter into contracts with doctors to provide care and preventive health services, sometimes within a specific service area. Except in emergencies, this type of plan only covers the costs of services provided by in-network caregivers.
#3. POS (Point of Sale)
When you use a POS, you pay less for physician and hospital care than when you use a network. A referral from your primary care physician is required to receive specialist care.
#4. PPO (Preferred Provider Organisation)
PPOs provide discounted services when you seek care from doctors and hospitals in a network. You are not required to obtain a referral for specialist care under this plan.11 Aetna. “HMO, POS, PPO, EPO and HDHP With HSA: What’s the Difference?”
Costs of Health Insurance
A monthly premium is required for health insurance coverage. However, if you require medical attention, you will be required to pay additional fees.
The deductible is the amount of money you must pay out of pocket before your insurance policy begins to cover costs. For example, if your annual deductible is $1,500, you must pay 100% of medical expenses up to $1,500 each year. Following that, your insurance policy takes effect.
Copays are predetermined payments for specific services such as urgent care, primary care, or a specialist visit. Depending on the plan, you pay before or after you meet your deductible. A plan, for example, may require you to pay a $20 copayment each time you see your doctor.
Coinsurance is a percentage of the service cost that you must pay. It varies according to the health plan. For example, if you have an 80/20 coinsurance plan, you would pay 20%, and the insurer would pay the remaining 80% of medical costs. However, not all plans require you to pay coinsurance, and those that do may charge a higher monthly premium than those that do.
Is It Possible to Have Two Health Insurance Policies?
Yes, you can have two health insurance policies. For example, if you are under the age of 26 and your parents cover you with two separate plans, one is your primary plan, and the other is your secondary plan.
When you receive medical treatment, your primary insurance company submits a claim, and your secondary insurance company pays its portion (if the medical service is covered). Having two health insurance policies does not provide you with twice the benefits.
You cannot select which plan is primary and which is secondary. The coordination of benefits by health insurance companies determines which plan is primary and which is secondary. This includes the so-called birthday rule, which applies when both parents have separate insurance policies for you. The parent’s health plan with the earlier birthday within the calendar year is considered primary in that case.
Can I have my own insurance while also being covered by my parents’ policy?
Yes, you are still eligible for coverage under your parent’s policy while having your own health insurance plan. This is referred to as having dual coverage.