Every parent is concerned about a child’s well-being and health. That is why it is common for parents to add their kids as dependents and provide them the much-needed security. But when the right time comes, grown-up kids have to be taken off their parent’s plan. So, when do adult kids age off their family insurance? And how can they find suitable adult coverage alternatives?
Age Limits for Staying on Your Parent’s Health Insurance Plan
Back in 2010, the Affordable Care Act (ACA) enabled young people to stay on their family plans until they turn 26. It means that kids can remain dependents on their family insurance up to this age, no matter the circumstances.
Here are some of the determining factors you might find interesting:
- Civil status (married or unmarried dependents)
- Financial status of the offspring
- Residence (whether the child is living alone or with parents)
- Eligibility for other health insurance options (individual, college-based, employer-based, etc.)
- Parental status
After the ACA became the law, the uninsured rate among adults aged 19 to 34 declined by 42%. And while the outcome might look positive, parents with grown-up children tend to spend a great deal of money to support them. And the spending often hurts their retirement plans. For instance, more than 75% of parents provided financial aid to their grown-up children in 2018.
Acting as a so-called family bank long-term can hardly prove beneficial to American parents. Let’s be fair: college can be tough. That is why it is sensible to help out and provide for a grown-up child at that point. But does it make sense to keep providing afterward?
Well, some parents might be confident about keeping their offspring on their plans but with minimum coverage required on their part, like covering premiums, for example. Some might consider it tough love. But parents often use the co-pay approach to nudge kids into adulting and taking care of themselves.
And to do that, grown-up children also need to be aware of the general recommendations on choosing their coverage.
What Is the Timeline to Choose a New Health Insurance Plan?
The first thing you need to know about shopping for a personal insurance plan is that the timeline depends on the type of policy your parents have.
Simply put, marketplace insurance enables you to enroll at any point during the year. It typically requires applying personally. But if your parents had an employer-based policy, you can count on it covering you only until the end of the month, which is the month of your 26th birthday.
There is also an alternative to this age limit that allows staying on the parent’s policy. Before making a final choice, here is what you need to know about both options.
Getting an Extension With the Insurance Rider
The age 29 rider can help adult kids under the age of 29 get an extension that allows staying on parent’s policies. The only issue is that the rider is only available in the state of New York.
If you want to make sure that you are eligible, here are the common requirements:
- You have to be an unmarried child
- You are unsuitable for employer-sponsored insurance
- Your age is under 29
But no need to worry if you do not live in New York. You can still get an extension in Florida, Nebraska, New Jersey, Pennsylvania, or Wisconsin. The age limits might differ depending on the state. That is why we recommend checking the state laws for further information.
Understanding Your Health Insurance Options After the Age of 26
At some point, young people find themselves aging off their family insurance. It can only mean one thing: looking for the best insurance offer. That is when the Special Enrollment Period can come in handy unless you have landed a great job along with insurance.
Aside from that, these are the alternatives young people should consider:
- Individual insurance. It is an excellent choice for those not yet employed or not attending the classes. Young adults can find numerous offers through the health insurance marketplace.
- School-based insurance. Multiple colleges and universities offer insurance-related services. The downside is that school-based plans might be less flexible and wide-ranging. Even so, for high school graduates and students, it can be one of the most convenient and cost-effective options.
- CHIP or Medicaid programs. Youngsters can use the marketplace to apply for both. But bear in mind that the eligibility requirements are different.
- Short-term plans. Let’s say that you need to bridge a specific time before enrolling in a regular plan. Choosing this option can be sensible if you are worried that you might suffer from a significant injury during the gap period.
Apart from health policies, parents and their offspring might share auto insurance. Check out the FAQ section for more information on healthcare concerns and other related matters.
Can I be kicked off the family insurance?
Yes, it can happen. Technically, parents have the legal right to terminate the insurance regardless of their child’s financial input. Keeping adult kids covered until they reach a specific age is only an option, not an obligation.
Can I be kicked off if I get married?
If you’re under 26, you cannot be automatically kicked off your parents’ policy regardless of your civil status.
Can I stay on my parents’ insurance if I move to another state?
Yes, you most certainly can. The only issue you might face is out-of-network medical assistance.
Do Age Limits Apply to Auto Insurance?
No, not in this case. You are all set if you keep an automobile at your parent’s address overnight. Of course, assuming that it is also your residence. If you decide to move out, you will have to take care of getting a separate policy.
Does Moving Out Constitute Being Kicked Off the Insurance?
Well, it is all relative. The crucial factor is the permanent overnight placement of your automobile. Moving out with the car implies the need to get separate coverage. But, at the same time, if you share more than one car with your parents, it is only sensible to keep you on the policy. In which case, it does not matter whether you moved out or not.
Victoria is a Senior Content Writer at American REIA. She helps customers find the right educational material through easily-digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers the latest industry news and various insurance topics, including auto, home, health, and life insurance.