The Affordable Care Act made it possible for young adults to stay on their parent's health insurance plans until the age of 26, regardless of where they live. This has helped millions of adults maintain access to healthcare when they otherwise might have lost coverage. However, for those who are approaching their 26th birthday, the idea of losing coverage and stepping into the complicated world of health insurance can seem daunting. Here’s what your next steps should be:
Step 1: Find Out Exactly When Your Coverage Ends
On some policies, coverage ends the day you turn 26 so you’ll need to have your own insurance lined up before your birthday. Other policies will give you until the end of the month following your birthday to figure things out. The most generous policies give 26-year-olds until the end of the tax year to sort out coverage.
To find out how long you have, contact your parents’ health insurance provider to ask.
Step 2: Find Out If Your State Offers Extensions
While the federal law requires health insurance policies to keep you covered until 26, some states have even longer coverage requirements. In New Jersey, for example, unmarried adults can stay on their parents’ insurance until 31. In some states, it could be indefinite for adults with certain, qualifying disabilities.
Check the dependent health coverage laws in your state to see if you might actually have some extra time to keep your parents’ coverage.
Step 3: Decide What Coverage You Need
Everyone’s health is unique to them and the kind of services you need to make sure are covered will be equally unique. To give yourself a jumping-off point, ask your parents to show you the details of their plan.
This way, you can see what kind of coverage you’ve had up to this point to make sure you get something comparable. After looking through the insurance plan you’ve grown up on, think about what kind of services you might want covered that are missing from that plan.
For example, if you wear glasses or contacts and know that the costs for new lenses or exams have mostly come out of pocket, you might want to make sure you add a more robust vision plan, like a VSP® Individual Vision Plan to your coverage after you age out.
Step 4: Talk to Your Employer
If you have a job that comes with employer-provided health insurance, your next step is to contact HR to enroll in their healthcare plan. Most employers have periodic “open enrollment periods” for their employees. However, aging out of coverage is considered a qualifying life event. This means your employer has to enroll you, even if open enrollment has ended.
If possible, start this process at least 30 days before you age out of your parents’ plan to avoid any gaps in coverage. You can also use this time to review the coverage they offer. Does it meet the basic needs you identified in step 3? What kind of dental or vision coverage do they offer, if any?
While an employer-sponsored plan will usually be the most affordable option you have, it doesn’t always meet all of your needs so be prepared to supplement it with additional policies as needed. Find out what additional coverage you need now while you’re enrolling so you aren’t left out in the cold when you actually need it.
Step 5: Compare Coverage Options
If your employer doesn’t provide a health plan or the coverage offered doesn’t meet your needs, you need to find insurance on your own. The Department of Health and Human Services has a website that helps you navigate coverage options and compare plans. If you’re looking for vision coverage options, you can always buy a plan on your own through VSP.
When you start your research, there are a few terms you’ll need to know to effectively compare health plans:
Premium. This is the base monthly amount you pay to have health insurance. It will differ depending on what services are covered and how high the deductible is.
Deductible. This is the amount you have to contribute to any healthcare costs before your insurance kicks in. For example, say you have a $2,000 deductible and then go in for a surgery that’s covered by your plan and costs $15,000. You would pay $2,000 toward that surgery and your insurance would pay the remaining $13,000. The lower your deductible, the less you have to pay before insurance kicks in.
Co-Payments. These are fixed fees you pay for health care services. They are separate from the deductible and the premium but are only charged when you visit a healthcare provider. For example, you might pay a $25 copay at your annual physical.
In general, plans with low premiums will have higher deductibles and vise versa. A low premium, high deductible plan could make sense while you’re young if you don’t have any chronic health conditions. However, if you do have chronic conditions or want the added security, paying a higher premium for a lower deductible is worth it.
Regardless of what plan you choose, act fast to avoid the risk of being uninsured. Those monthly premiums might seem like a burden after going so long without having to worry about it. However, being stuck with an astronomical medical bill because you’re uninsured would be much worse.
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