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Help Your Child Buy Their Own Health Insurance Plan

Mar 01, 2020 3 min read Kate Ashford

Key Takeaways

  • Healthcare.gov can help your child shop for plans and estimate out-of-pocket costs.
  • A 120-day special open enrollment period bookends your child's 26th birthday.
  • Catastrophic plans cost less up front — but may cost more later.

If you have a child who's 26 or under, there's a good chance they're on your health insurance plan, even if they have a paying job. One study from ADP found Opens in new window that, even though 86% of employees under age 26 are eligible for job-based health insurance, only 52% elect to get covered that way.

But at age 26, that all changes, and your children must fend for themselves on the open marketplace. They may not know how to get health insurance. Here's how to help them navigate the coverage waters.


How long can a child stay on their parents' health insurance?

That depends on your health care plan. If your child is on your Marketplace plan, their coverage ends on Dec. 31 of the year they turn 26. If they're on your job-based plan, their coverage typically ends the month they turn 26, or even the very day they celebrate their birthday.

While most people need to wait for open enrollment to sign up for a new plan, your child's 26th birthday triggers a special enrollment period that lasts from 60 days before their 26th birthday to 60 days after. In general, they'll need to enroll in a plan by the 15th of the month in order for the plan to start on the 1st of the next month, so make sure they plan accordingly.

Where can your child get health insurance?

If they're employed with a company that offers benefits, they can ask their HR department about enrolling in the company's health care options. If that's not an option, they may be able to get COBRA coverage through your plan, although it requires a written request.

If they're a student, they will likely have access to a college-sponsored plan as long as they're enrolled in classes, or they may be able to join a health insurance plan through a university alumni association. If they're eligible to join an industry association (such as the Freelancers Union Opens in new window), they may be eligible for coverage that way.

There's also the Health Insurance Marketplace, where they can shop for a plan that meets their needs. If their income falls below a certain level, they may qualify for Medicaid.


How much will health insurance cost?

The average individual health insurance premium in 2018 was $440 per month, according to eHealth Opens in new window, with an average deductible of $4,328.

If your child isn't covered via their job and you don't claim them as a dependent on your taxes, they may qualify for savings based on their income.

There are catastrophic health plans available that carry lower premiums along with very high deductibles for coverage, and they protect you from the worst-case scenario situation. These plans are typically only available to consumers under 30 or those with a hardship or affordability exemption for regular Marketplace plans. But your child must understand what they're purchasing — the average deductible Opens in new window in 2020 for a catastrophic plan was $7,148. This means someone with that plan must spend $7,150 before the plan kicks in, although most plans do cover three primary care visits per year.


What you can do next

Don't wait until your child turns 26 to help them explore health insurance options. The time to start planning is months ahead of that significant birthday. Sit down and discuss with them, in detail, their income and employment situation. What kind of plan would make the most sense for them? Ensure they understand all of their options and that they are comfortable navigating the marketplace website well ahead of time. Explain to them that, while it may be overwhelming, it's also an important step toward becoming a truly independent adult.




Kate Ashford is a freelance journalist who writes about personal finance, work and consumer trends. She has written for BBC, Forbes, LearnVest, Money, Real Simple and Parents, among others.


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