Prior to turning 26 years old, young adults are allowed by the Affordable Care Act to be covered under their parents’ health care plans. However, once they turn 26, they will be removed from those health insurance plans. Luckily for most young adults, this is not an automatic process. Keep reading for more information about how to navigate your health insurance choices once you are no longer eligible for your parents’ plan.
Staying on Your Parent’s Health Insurance Plan
After you’ve been added to your parent’s job-based insurance plan, as a dependent, you will be able to stay on until you’re 26. Depending on the plan, there can be exceptions to this rule which would grant leeway to a young adult. For the most part, however, young adults will be able to remain as dependents on their parents’ insurance plan even if they:
- Begin schooling
- Refuse an employment opportunity that includes job-based coverage
- Adopt a child
- Get married
- Still live with or near parents
Just remember that coverage with your parents’ plan usually ends when you turn 26. So it is important you understand the rules and exceptions of the insurance plan before making any future decisions.
How to Get Added to Your Parents’ Plan
A dependent can be added into a parental health insurance plan through one of two ways:
- Job-Based Insurance: One of the easiest ways of obtaining coverage for your children. In this type of coverage option, parents are able to add their children to the insurance plan through the yearly Open Enrollment Period or during a qualifying Special Enrollment Period.
- Marketplace Plan Purchase: The alternative method for obtaining dependent coverage is by parents’ purchasing a Marketplace plan where a child is included. The same rules for Open and Special Enrollment apply in the Marketplace.
Emergency Parental Plan Extension
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is formally regarded as an established law in which employers are required to extend temporary health insurance to employees that may be departing. Whether an employee is voluntarily or involuntarily leaving their service, COBRA mandates employers to continue providing coverage benefits.
In order to qualify for these benefits, a company must have 20 or more employees, yet it is not uncommon for smaller companies to have similar eligibility requirements and benefits that bear semblance to COBRA. With this in mind, the main purpose of this law is to prevent Americans from having a gap in health insurance coverage.
How does this tie into losing coverage from your parent’s health insurance plan? Through COBRA, a young adult is able to submit a request to their parent’s boss, and thus be eligible for continued coverage for up to 36 months after turning 26. In the event that the company your parents work for has less than 20 employees, you might be eligible for state programs that provide benefits similar to those offered by COBRA.
How to Enroll in a Health Insurance Plan
If the above option of extending your health insurance coverage does not work to your favor, you can always opt towards enrolling in a health insurance plan through the Marketplace. However, before doing so, you must be aware of two types of enrollment periods:
Open Enrollment Period
The Open Enrollment Period is known as the yearly period in which any individual can enroll into a health insurance plan. In order to be eligible, most people have to wait until the annual enrollment period which typically starts on November 1st. In some states, however, you might be eligible to enroll outside of this period if you undergo a life-changing event such as marriage, loss of health coverage, or a pregnancy that justifies obtaining health insurance.
Before partaking in any open enrollment period, an individual should keep in mind two things. First, when obtaining job-based insurance, the open enrollment dates will vary. To avoid any confusion, you should consult with your employer. Secondly, instead of utilizing the Marketplace, you can apply for Medicaid or CHIP-based insurance where you’re free to enroll at any point during the year.
Special Enrollment Period
A Special Enrollment Period is the time interval in which you apply outside of the Open Enrollment Period. This type of special enrollment maintains the same qualifications as Open Enrollment while granting special provisions for the individual.
For instance, a Special Enrollment Period, depending on the type, offers a 120-day time frame to enroll in a health insurance plan. Usually, you have 60 days before an event (in this case turning 26), or 60 following the event to enroll. If you fail to enroll in this enrollment period, then it is possible you will have to wait until the next Open Enrollment Period becomes available.
Health Insurance Options
As the day comes closer until you turn 26, you should start considering what your options are in regard to obtaining health insurance coverage. Fortunately for you, there are several different ways of procuring health coverage after turning 26. Each one of these options will be dependent on your situation. These options include:
Medicaid
Medicaid is a federal and state-subsidized insurance program which focuses on providing low-cost, affordable health insurance. This program is focused on aiding low-income families, people, children, pregnant women, people with disabilities, and even the elderly.
Even though Medicaid is a federally funded program, states are often the ones that dictate the eligibility requirements and accessibility according to how much of a state’s budget is allocated toward Medicaid. As a result, Medicaid eligibility, benefits, and program names will vary between each state.
If you wish to apply for Medicaid, you can do so at any time, and as soon as you qualify you’ll automatically receive coverage benefits.
Medicare
Similar to Medicaid, Medicare is a federal government program which serves to provide health insurance coverage to individuals over the age of 65. In some cases, program benefits are granted to the elderly under the age of 65 through special occasions. You can apply through the official government website if you think you might qualify.
As soon as you become eligible for Medicare, you’ll gain access to certain health benefits through Original Medicare, a federally supported fee-for-service program, or through Medical Advantage, which is a private insurance alternative that offers varying Medicare bundles.
Original Medicare is broken into two parts, each with distinct services it can offer to a policyholder. These parts are:
- Medicare Part A: (Inpatient/Hospital Services)
- Medicare Part B: (Outpatient/ Medically Necessary Services)
In addition to these first two parts, Medicare is further divided into:
- Medicare Part C: (Medicare Advantage – Service Bundles)
- Medicare Part D: (Prescription Drug Coverage)
CHIP Coverage
The Children’s Health Insurance Program, otherwise known as CHIP, offers health insurance coverage to low-income families with children that are not eligible to apply for Medicaid benefits. In addition to low-income families, pregnant women are also eligible for CHIP coverage depending on the state they reside in. Through CHIP insurance coverage these families and certain individuals are able to obtain basic healthcare benefits such as:
- Doctor’s Visits
- Prescriptions
- Emergency Services
- Immunizations
- Lab Services
- Hospital Care
- Dental/Visual Treatment
Now, before applying for CHIP, it is crucial that you browse through the program’s eligibility requirements given that they differ between states. For the most part, CHIP applicants must have children under the age of 19 and be a U.S citizen or legal resident. Furthermore, the child must be a dependent alongside living with a family that has a low annual income threshold.
If any of these requirements are met, then you are on your way towards obtaining CHIP insurance coverage. But how do you apply? You can try calling 1-800-318-2596, you can fill out an application over the phone, or even try to apply online by accessing the Health Insurance Marketplace. Finally, it is worth noting that enrollment into the CHIP program is possible at any point throughout the year.
Employer-Based Insurance
One of the most frequent methods of obtaining health insurance is through job-based insurance coverage. With the passing of the Affordable Care Act, individuals now have more choices and opportunities to receive health insurance through their employers.
Employment-based insurance is generally provided in something that is called group health insurance coverage. In this type of coverage, companies can offer coverage to eligible employees with either one plan or a selection of plans. Group coverage is usually offered by businesses that have 50 employees or more. In contrast, employers with fewer than 50 employees utilize the Small Business Health Options Program (SHOP) to provide affordable major medical health insurance to these small companies.
Eligibility for job-based insurance is subject to company size and whether you’re a part-time or full-time employee. In regard to enrollment, this can differ broadly as a result of the type of insurance coverage being offered to employees coupled with the services given.
When considering job-based insurance, there are many factors that affect the benefits or even the affordability of the insurance plan that the employee is being provided. These are things worth considering when thinking of opting for insurance with your employer rather than any of the other health insurance options that have been mentioned thus far.
Self-Purchased Insurance
In the event that you’re not eligible for employer-based health insurance, then it is possible that you may have to obtain coverage through a private insurance company. However, before opting towards self-purchased insurance, many people would rather opt towards gaining their missing coverage with either Medicare, Medicaid, job-based coverage, or even CHIP.
Nevertheless, when none of these options are available, you might as well resort to purchasing your insurance. This is made possible because of the existence of the Health Insurance Marketplace. In the Health Insurance Marketplace, you are able to compare and contrast the broad range of insurance plans available. Not only are you able to obtain plans based on their affordability, but also based on the services provided.
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