Each year you celebrate a birthday. Some birthdays are a bigger deal than others. Sixteen is when you can drive, eighteen is when you can vote. You’re legally allowed to drink at twenty-one. But twenty-six? It’s been an insignificant birthday for many, until the Affordable Care Act was passed. Then it became a significant number.
Twenty-six is the maximum age you’re allowed to be covered on your parent’s health insurance plan. This allows you to be covered throughout college (and potentially grad school) and your first few years as an working professional. Once you hit 26, you’re on your own. Time to really grow up!
If you’re a young adult shopping for your first health insurance plan, what do you need to know? Let’s take a look at what’s important. (If you’d rather skip this, then you can take a shortcut and contact an insurance agent who can spell out your options for you.)
Option 1: Employer Insurance
If you’re currently working a job that offers employees health insurance, that’s a great first step. Employer plans are subsidized and can be cheaper than a plan you might find on a marketplace. One drawback is that your options are limited to what your employer offers. If you’re interested in getting Oscar health insurance but your company only offers Blue Shield, then you might be out of luck.
Option 2: Affordable Care Act
You can’t help when you were born, so you might have a birthday that’s after the open enrollment period. That’s ok, according to the ACA, you’re still eligible for Obamacare.
Turning 26 qualifies you for the Special Enrollment Period, which allows you to buy health insurance after the open enrollment deadline. You may also qualify for tax credits based on your income.
When Should You Enroll?
Typically coverage under your parent’s employer’s plan will end at the end of your birthday month. You have the option of enrolling in your own health insurance plan before your 26th birthday. If you do enroll before your birthday, then your insurance can go into effect the first day of the month you lose coverage.
As aforementioned, you are eligible for the Special Enrollment Period. This is a sixty day window after your birthday. You must get your insurance in this timeframe, otherwise you’ll have to wait until the next open enrollment period. If you fail to obtain health insurance during this window, then you’re subject to a fine for not having health insurance.
If you are covered under your parent’s marketplace insurance plan, you have the option of staying on the plan until December 31st of the policy year. Then you can you sign up for your own health insurance during Open Enrollment.
You’ve got a lot going on in your mid-twenties. You’re figuring out your life path, probably worrying about where your career will go. Worrying about your health insurance is the last thing you want to do. But 26 is the magic number and that means you can no longer stay on your parent’s plan. Getting health insurance at 26 is not difficult. You have two primary options to research. If you’d like help, insurance agents are a great resource and will help guide you.