What happens when your child turns 26: A guide for insurance consumers

Parents look forward to a number of age-related milestones for their children. At 16, they can get their driver’s license. At 18, they can cast their vote. And at 26, they need to make big decisions about their health insurance coverage. Here are five paths they could take: 

1. Removal from Parent's Health Insurance

Before the Affordable Care Act (ACA), children were typically removed from their parents' health insurance plans once they turned 19 or graduated from college. However, the ACA changed this, allowing young adults to stay on their parents' plans until they reach the age of 26. Each carrier has its own rules surrounding exactly when coverage will terminate, but often that date is the child’s 26th birthday or the end of that calendar year. Talk to your benefits professional, HR team, or insurance agent to ensure you’ve identified the correct timeline.

2. Special Enrollment Period

When your child meets the criteria above, they will no longer be eligible to remain on your health insurance plan as a dependent. However, this doesn't mean they're left without options. Losing coverage qualifies them for a Special Enrollment Period (SEP), allowing them to enroll in their own health insurance plan through the Health Insurance Marketplace outside of the regular open enrollment period. This provides the opportunity to find a plan suiting their needs and budget.

3. Employer-Sponsored Coverage

If your child has access to employer-sponsored health insurance, encourage them to explore this option. Turning 26 is considered a qualifying life event, which means they can enroll in their employer's plan outside of the regular enrollment period. It's essential for them to compare the benefits and costs of their employer's plan with individual marketplace plans to make an informed decision. A licensed insurance professional can help with this decision.

4. Medicaid 

For those with lower incomes, Medicaid may be a viable option. The eligibility criteria for these programs are based on income, so your child may qualify if their income falls within the specified range. Turning 26 can trigger a change in financial circumstances, making them eligible for these programs.

5. COBRA Coverage

If your young adult is covered by your employee group health insurance, he or she may be eligible for coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). This allows him or her to maintain their existing health insurance plan, but you or they will be responsible for the full premium cost, including the portion previously paid by the employer. COBRA coverage typically lasts for up to 18 months, giving them a temporary safety net. COBRA can be extended under certain circumstances. 

Don’t leave your child uncovered

Turning 26 is a significant time in your child's life, especially when it comes to health insurance. Understanding the options available during this transition is vital to avoid a lapse in coverage. . Whether they choose to enroll in a marketplace plan, join their employer's plan, or explore other options, being informed and proactive will help them navigate this change with confidence and peace of mind. Every individual's situation is unique, so it's essential to talk with a licensed health insurance agent to help find the best-fitting path forward.