When Do You Get Kicked Off Your Parents’ Insurance?

The Affordable Care Act (ACA) allows young adults to remain on a parent’s health insurance plan. This provision provides continued coverage during early adulthood. Understanding when coverage ends and what options are available afterward is important for health care planning.

The Age 26 Rule and Dependent Eligibility

The ACA mandates that most private health insurance plans, including those purchased through the Health Insurance Marketplace and employer-sponsored plans, allow young adults to stay on their parents’ health insurance until they turn 26. This rule ensures coverage regardless of personal circumstances, such as being married, no longer a student, not living with parents, or not financially dependent.

Coverage generally extends until the young adult’s 26th birthday, but the exact termination date varies by plan. For employer-sponsored plans, coverage typically ends on the last day of the month the dependent turns 26. For plans purchased through the Health Insurance Marketplace, coverage usually continues until December 31st of the year the young adult turns 26.

Factors That Do Not Impact Eligibility

Under the ACA’s age 26 rule, several common circumstances do not cause a dependent to lose coverage. For example, getting married, graduating from college and no longer being a student, or moving out of the parent’s home do not terminate eligibility. Furthermore, becoming financially independent or no longer being claimed as a dependent on a parent’s tax return does not affect the ability to remain on the parent’s health plan. Even obtaining a job or having access to employer-sponsored health insurance through one’s own employment does not automatically end parental coverage before age 26. The primary determinant for continued eligibility on a parent’s plan remains simply being under 26 years old.

Events That Can Lead to Earlier Coverage Loss

Certain events related to the parent’s policy or circumstances can lead to a dependent losing coverage before reaching age 26. If the policyholder parent loses their job, their employer-sponsored health insurance may terminate, ending coverage for all dependents. Similarly, if a parent changes jobs and the new employer’s plan does not offer dependent coverage, or if the parent’s existing plan is discontinued, dependent coverage could cease.

A dependent moving permanently outside the health plan’s service area can also result in loss of coverage. The death of the policyholder parent leads to the termination of the dependent’s coverage. Parents also have the option to remove a dependent from their plan, generally restricted to specific enrollment periods or qualifying life events.

Transitioning to Independent Health Coverage

Upon losing coverage from a parent’s plan, particularly when turning 26, individuals gain access to a Special Enrollment Period (SEP). This allows them to enroll in a new health insurance plan outside of the annual Open Enrollment Period, providing a 60-day window before and after the loss of coverage to secure a new plan and avoid a gap.

Several avenues exist for obtaining new health insurance. Many individuals can enroll in an employer-sponsored plan if their employer offers health benefits, as losing parental coverage is a qualifying event for immediate enrollment. The Health Insurance Marketplace, accessible through HealthCare.gov or state-specific exchanges, is another option. Here, individuals can compare plans and may qualify for subsidies like Premium Tax Credits to lower monthly premiums based on income and household size.

For a temporary continuation of the parent’s group health plan, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows eligible individuals to extend coverage for up to 36 months. This can be expensive as the individual pays the full premium plus an administrative fee. Individuals with low income may qualify for Medicaid, a government-funded health program, particularly in states that have expanded eligibility.