Can I Stay on My Parents’ Insurance If I Move Out?

Young adults often have questions about staying on a parent’s health insurance plan, especially after moving out. Understanding the regulations surrounding dependent health coverage is important for ensuring continuous access to care. This article provides clarity on the rules and options available for young adults navigating their health insurance choices.

Eligibility Criteria for Dependent Coverage

The Affordable Care Act (ACA) changed the landscape for young adult health insurance, mandating that health plans offering dependent coverage must extend this coverage to adult children until they reach age 26. This federal requirement, which took effect for plan years beginning on or after September 23, 2010, applies to most individual market plans and employer-sponsored plans, including grandfathered and non-grandfathered plans. Under these provisions, a child’s marital status does not impact their eligibility to remain on a parent’s plan.

Factors such as financial dependency on parents, enrollment in school, or even having access to an employer-sponsored plan of their own generally do not affect a young adult’s eligibility to stay on a parent’s health insurance until age 26. The ACA explicitly prohibits plans from imposing limits based on these criteria.

Moving Out and Your Health Insurance

Moving out of a parent’s home does not automatically terminate dependent health insurance coverage. Under the ACA, a dependent’s physical residency has no bearing on their eligibility to remain on a parent’s health insurance plan until they turn 26. This means that a young adult can move to a different state and still be covered by their parents’ plan, provided the plan offers a network of providers in the new location.

While federal law allows continued coverage regardless of residency, practical considerations regarding provider networks can arise if a dependent moves out-of-state. Some health plans, particularly Health Maintenance Organizations (HMOs), might have limited networks that do not extend across state lines, potentially making it challenging to find in-network care. Preferred Provider Organizations (PPOs) or Point of Service (POS) plans may offer broader out-of-network coverage, but often at a higher cost. Reviewing the specific plan’s network coverage in the new location is advisable.

Events That End Dependent Coverage

While moving out does not end dependent coverage, specific events do trigger its termination. The most common event is turning 26 years old; coverage under a parent’s plan ends on the last day of the month the dependent turns 26. For plans obtained through the Health Insurance Marketplace, coverage may extend until December 31 of the year the dependent turns 26.

Enrolling in one’s own employer-sponsored health plan can also end dependent coverage. However, the ACA generally allows individuals to remain on a parent’s plan even if they have access to their own employer’s coverage. If the parent’s employer plan is a “grandfathered plan” that existed before March 23, 2010, it might have an exception allowing it to exclude adult children who are eligible for employer-sponsored coverage elsewhere. Losing a parent’s plan due to a parent’s job loss or other changes in the parent’s coverage also leads to termination.

Finding Your Own Health Insurance

When dependent coverage ends, several avenues exist for obtaining independent health insurance. Employer-sponsored plans are a common option for those who are employed. Losing dependent coverage, such as by turning 26, is considered a qualifying life event, which triggers a Special Enrollment Period (SEP). This allows individuals to enroll in an employer’s plan outside of the usual annual enrollment period, typically within 30 to 60 days of the qualifying event.

The Health Insurance Marketplace provides another option for those who do not have access to an employer plan or prefer to explore other choices. The loss of dependent coverage also creates a Special Enrollment Period on the Marketplace, usually lasting 60 days. During this period, individuals can apply for and select a plan, and they may be eligible for financial assistance, such as premium tax credits, based on their income. Medicaid is also available for low-income individuals, with eligibility varying by state based on income, age, and family size.