The Affordable Care Act changed the rules for health insurance in many ways. Younger people particularly benefitted from one change, a rule that insurers cannot drop them from their parents' coverage simply because of their age or the address they call home. The Department of Health and Human Services indicates that coverage of young adults increased by 5.5 million over five years after the passage of the ACA.
The Age Limit
The ACA requires that you can be covered under your parents' health plan at least until age 26, but pinning down the exact date can be tricky depending on the type of coverage your parent has. It extends to the last day of December of the year in which you turn 26 if your parents have a plan through the Health Insurance Marketplace, but the cutoff date can be as early as your 26th birthday for other plans. Large employers are obligated to continue coverage for their workers' dependents through the end of the month in which they turn 26.
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Aging out qualifies you for a special enrollment period for Marketplace insurance policies.
Independently purchased policies have the option of covering you through the end of the month in which you turn 26, or the end of the year. Healthinsurance.org recommends that you check with your plan to be sure and to avoid any unpleasant surprises.
The Rules Are Generous
You can be married and you can have children of your own, but the ACA rule doesn't extend to your children or your spouse.
Your parent doesn't have to claim you as a dependent on their tax return in order for you to qualify, and they don't have to be supporting you. But you must be your parents' adopted or biological child. Stepchildren and foster children aren't covered, nor are dependents who aren't U.S. citizens or naturals and who don't live in the U.S., Canada or Mexico.
It doesn't matter if or where you attend college. You don't even have to be living under your parents' roof. You can't be disqualified for benefits if you turn down the option of insurance coverage through your own employment.
Consider also: Do I Have to Accept Employer Offered Health Insurance?
Are All Plans Affected?
The ACA doesn't require insurance companies to abide by these criteria if they never offered dependent coverage in the first place. And Medicare doesn't offer dependent coverage, so these policies are an exception to the usual rules as well.
Small employers aren't subject to the ACA employer mandate, so they're exempt from the age-26 rule. They're not required to provide any employee coverage at all. Dental insurance and vision insurance plans can be exempt if they're not included in a health insurance plan without the insured having to make an extra election and increased premium in order to purchase it.
All benefit packages must be made available to dependents at no additional charge.
When You’re No Longer Covered
The ACA mandate is generous, but you'll eventually age out of its covered plans. You have a few alternatives when this happens.
Aging out qualifies you for a special enrollment period for Marketplace insurance policies. You don't have to wait until the next open enrollment period to sign up for your own plan. You can apply based on your own income as long as your parents aren't claiming you as a dependent on their tax return.
You might qualify for a special enrollment period with your employer's plan or your spouse's employer's plan as well, but you must usually request this within 30 days of losing your parents' employer-sponsored coverage. You have 60 days after losing your parents' coverage for special enrollment for a Marketplace plan.
- HealthCare.gov: How to Get or Stay on a Parent’s Plan
- U.S. Department of Health & Human Services: Young Adult Coverage
- U.S. Department of Labor: Young Adults and the Affordable Care Act
- Healthinsurance.org: Can Young Adults Still Remain on Their Parents’ Health Plans Until Age 26?
- International Foundation of Employee Benefit Plans: 9 Questions Parents Are Asking About the Age 26 Mandate