When should an adult child come off of their parents insurance plan?

If you are an adult child and you are still on your parent’s health insurance plan, you might be curious as to how long you can stay on it. In the past, a child would no longer be eligible for coverage on their parent’s plan once they attained the age of 19. Now, due to the Affordable Care Act, children may stay on their parent’s health insurance plan until they reach the age of 26. As an adult child, you can stay on a parent’s insurance plan as a dependent even if you:

  • Start or leave an educational program
  • Live in or out of the home belonging to your parents
  • Get married
  • Have or adopt a child
  • Are no longer regarded as a tax dependent
  • Turn down employer-based coverage

Take the time to examine your parent’s employer plan as some states and plans have different rules regarding adult children on their parent’s insurance plan. Also, please remember that you must have qualifying health insurance or pay the penalty on your next tax return and that penalty increases each year with inflation.
Purpose Of The Affordable Care Act
Since 2010, the Affordable Care Act provides access to health insurance coverage for young adults who may not have coverage otherwise as long as their parent’s insurance allows coverage for children. The Affordable Care Act helps the uninsured acquire health insurance coverage. According to statistics, roughly 30 percent of young adults in the United States are uninsured. The act allows adult children to stay on their parent’s insurance until they reach the age of 26.

How It Works
If your plan offers family coverage, you may want your child on your insurance even if he is not living with you or is married. You do not need to be supporting your child or claim her as a dependent on your federal tax return for her to qualify for coverage under the plan, and she does not need to be attending school. Your child may stay on your plan even if he is eligible to enroll in his own employer’s plan. When an adult child turns 26, they can move off your plan and join in their own plan. When the child becomes 26, a special enrollment period begins. This period starts when the child becomes 26 and continues for 60 days. The child can enroll before they lose coverage to prevent any gaps in coverage. Marriage does not affect eligibility. Dental and vision coverage is required only for children under the age of 19.

Staying On Your Parent’s Plan
By the law, an insurance company can’t charge higher premiums for insuring an older child. Although the company may raise premiums to cover the cost of insuring the adult child, it can’t charge more than it would if the child was a young child. Insurers must increase the premiums that families must pay for dependent coverage to extend plan coverage for older children. These provisions apply in all states. Parents are under no obligation to insure their child if they so choose. There are advantages for you to stay on your parent’s insurance plan:

  • The majority of plans allow parents to pay dependent coverage using pretax dollars which reduces the cost of insuring the child.
  • If parents are already covering other dependents, the cost to add an adult child to their plan may cost very little.
  • Parents who purchase insurance through the marketplace rather than an employer may also add dependents to their coverage.
  • The value of dependent coverage is not part of the parent’s taxable income.

Rejoining Your Parent’s Plan
An adult child below the age of 26 is eligible to re-enroll in their parent’s plan after coverage ends. If the child has health insurance of their own and loses it, they can get insured on the parent’s plan if it offers family coverage. However, a child can’t get coverage if the parent retires as Medicare does not cover dependents.

An uninsured young adult under the age of 26 can receive health insurance on a parent’s health insurance plan. If you are an uninsured adult child under the age of 26, you may remain on your parent’s health insurance. Check with your parent’s employer or plan as each may have their provisions regarding coverage.