One of the legacies of the 2010 Affordable Care Act — more commonly known as Obamacare — is the ability for adult children to remain on their parents’ health insurance plans until their 26th birthday. Previously, insurers often required young adults to be enrolled in college to maintain coverage after reaching an age specified by the company.
Having those extra years on a parental policy allowed these adult children a chance to pursue other opportunities and didn’t rush them into taking just any job merely to have coverage through an employer-sponsored health plan. Instead, they had the freedom to take an apprenticeship or internship that didn’t offer benefits, try out the gig economy or take some time off to travel without the pressure of having to secure insurance.
But it’s amazing how quickly those years after college or your 21st birthday pass. If you find yourself approaching 26 — and the loss of your medical insurance benefits — there are steps you can take to be prepared when the time comes.
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Research Existing Options
If you, or your spouse, think you are eligible for an employer-sponsored health plan, that is the first option to investigate. Even married young adults up to age 26 are able to stay on their parents’ plan, and you might have declined the coverage available through your work or your spouse’s job because your family plan offered better benefits.
While employer health plans have open enrollment periods, you will be able to sign up as you turn 26; losing your coverage falls under the list of qualifying events to register outside of open enrollment. Check with your company’s human resources department, and if you find you’re eligible for coverage, ask for an enrollment packet that will include a list of rates and available insurance.
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Under your parents’ plan, you might be able to extend your benefits for up to three years through the Consolidated Omnibus Budget Reconciliation Act (COBRA). Your eligibility depends on the size of the employer sponsoring the plan. If you choose this option, you must do so within 60 days of reaching age 26. Since your parent’s employer likely paid a significant portion of the premium and your parents paid a small share, the cost of COBRA insurance might surprise you. COBRA really was designed to be a short-term solution to keep you from having a gap in your coverage. It’s ideal, for instance, if you’re starting a new job and your insurance won’t kick in for a few months.
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Shop the Marketplace
With Obamacare came the creation of the marketplace, where you can shop for insurance coverage that isn’t tied to an employer. The place to start is the federal website, where you’ll enter your ZIP code to be directed to the proper site to review available insurance for your area. Many states offer their own marketplace sites, and government-backed subsidies are available, depending on your income, to help you pay the monthly premiums. While you can select a plan without assistance, there are “navigators” available to you at no cost to help with your enrollment and to answer questions.
In some locations, your insurance could be free. New York, for example, offers the Essential Plan. For a person earning no more than $25,760 a year, there are no premiums and no deductibles for health plans, which include dental and vision coverage. Benefits include doctor visits, including specialists, tests ordered by your doctor, prescription drugs, inpatient and outpatient care at a hospital, and more.
Pamela Sams, a financial advisor in Virginia, went through the health plan transition when her daughter turned 26. She stressed the marketplace could be an affordable option and encouraged reviewing the plans.
“Going without health insurance is a risky proposition,” she said.
Undergo Medical Procedures Now
Once you’re staring at age 26, such as right after your 25th birthday, it’s a good time to think about medical procedures that you anticipate you’ll need — especially if your current plan has generous benefits. If you have a preexisting condition and your doctor recommends procedures down the road, for example, ask your doctor if it’s advisable to have them performed as soon as possible.
It’s a recommendation attorney Janene Oleaga of Oleaga Law LLC makes to her clients. As a reproduction and adoption attorney, she helps clients in New York and Maine through the process of having a baby through assisted reproductive technology and other means. For prospective parents who know they will face reproductive challenges, she urges testing to learn more to help make a road map for the future.
“Before losing your parents’ health insurance you should undergo some form of genetic testing if it is covered,” she said. “Your genetics won’t change so this information isn’t time-sensitive. If you learn you have the ability to pass a genetic condition into your child it may help to mentally plan for the cost of IVF or other assisted reproduction early on. Depending on how close you are to starting a family, fertility testing may also be advisable, if covered.”
She said she had the testing while still on her parents’ insurance.
“I think everyone should get the bloodwork for genetic testing because why not? It isn’t comprehensive but it is minimally invasive and can give you some indication of genetic conditions. I had my bloodwork done for a number of things, including genetic testing, before I lost my parents’ health insurance and was happy I did,” she said.
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Last updated: Sept. 20, 2021