What Happens When My Kids Need Their Own Health Insurance?

Mother and teenage daughter

As parents we provide for our children’s basic needs. That includes health insurance, so they have access to the medical care they need, when they need it. However, kids grow up, and there comes a time when they need their own health insurance. Here is some information that could help you and your child with the transition.

At What Age Do Kids Need Their Own Health Insurance?

Under the Affordable Care Act (ACA), health plans and insurers that offer dependent child coverage are required to make that coverage available until the child turns 26, as stated by the U.S. Department of Labor (DOL). This rule applies to both married and unmarried children and all employer sponsored and individual health plans. It doesn’t matter if the child is not living with the parents, is not attending school, is not financially dependent on the parents, or is eligible to enroll in an employer sponsored plan, as stated by the U.S. Department of Health & Human Services (HHS).

What Happens With Health Insurance When a Child Turns 26?

Dependent child health plan coverage ends on your child’s 26th birthday (although some employers and insurers may offer some leeway). At that point, he or she qualifies for a Special Enrollment Period. This is a time outside open enrollment when you can sign up with a health insurance plan. The 120-day Special Enrollment window begins 60 days before your child’s 26th birthday and ends 60 days afterwards (30 days afterwards if buying an individual plan not on the ACA marketplace). The window may be different if your child is enrolling in an employer’s health plan, in which case it is usually 30 days after losing the previous coverage.

What Are Your Child’s Options for Health Coverage After Age 26?

The Affordable Care Act created exchanges that make it possible to shop for and compare health plans in one place. Other options when your child is losing coverage under your health plan include:

  • Employer sponsored health insurance: This is one of the most affordable and easiest ways to obtain health insurance.
  • Spouse’s health insurance: If your child is married, he or she may be eligible for coverage under a spouse’s health plan.
  • COBRA: The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) who lose their health insurance benefits the right to continue coverage under the group health plan, under certain circumstances for a limited period of time. This type of health coverage is expensive. The employer does not cover any portion of the premium, and there is an additional administrative fee of up to 2%.
  • Individual health plan: This can be an affordable option through the exchanges, depending on how much your child makes. With an annual salary of approximately $50,000 or less for a single person, lower premiums and tax credits are available.

If your child’s 26th birthday is approaching, now is the time to plan for health insurance coverage in the future. Our experienced agent will be happy to help you find an affordable plan that meets your child’s healthcare needs.