Children can stay on a parent’s plan until they turn 26. That includes even if they don’t live with you or even live out of state.
However, whether it’s a wise decision depends on the health insurance plan and the provider network.
The Affordable Care Act (ACA) allows young adults under age 26 to remain on a parent’s health insurance policy — even if the child is:
- Not living with their parents
- Attending school
- Not financially dependent on the parents
- Working and eligible to enroll in an employer’s health plan
If your employer’s health insurance plan allows you to add dependents, you can put your child on the policy and keep her there until she turns 26. However, if she moves to another state, she may find that none of her local medical providers participate in your insurance plan’s network.
Not having in-network provider options means much higher out-of-pocket costs. Health insurance plans like preferred provider organization (PPOs) let members get medical care outside the provider network but at higher costs. Plans like health maintenance organization (HMOs) don’t typically reimburse for out-of-network care. In that case, you would need to cover all of those health insurance coverage costs.
Why do health insurance companies charge more for providers not in their network? Out-of-network providers haven’t agreed to rates set forth by your insurance company, so instead, the members pick up more or all of those costs.
Your child should likely look to get her own health insurance plan if she has trouble finding providers in her new area that accept the health plan.
There are a few places she could turn. The Affordable Care Act marketplace is one option to get new health insurance. Private health insurance companies offer health plans on the marketplace. Those plans are also eligible for federal government subsidies that help reduce the cost of ACA plans.
The marketplace’s open enrollment runs from Nov. 1 to Dec. 15 in most states. However, if she is turning 26, that starts a special enrollment period. During special enrollment, she can sign up for a health plan in the marketplace.
Those health plans are comprehensive and cover everything from emergency care to doctor visits.
The health insurance marketplace also offers catastrophic health insurance plans to people under 30. Catastrophic health plans provide low premiums but high deductibles. That means your child won’t pay many upfront health insurance costs but will pay more when care is needed.
Another option may be Medicaid. Medicaid is available for those with low incomes. The low-cost plans offer comprehensive health coverage.
A third option in most states is short-term health insurance. Those plans are only available for a year and offer limited coverage. Though short-term health plans have low premiums, they can have large out-of-pocket costs with high deductibles and offer few benefits. Some states don’t allow short-term health insurance, while others let health insurance companies offer coverage for fewer months.
Yet another option is for your child to get new coverage with her employer if she’s employed and her job offers health insurance. Employer-sponsored health insurance is usually more affordable than marketplace plans since employers pay for more than half of employee health insurance costs.