Amidst all the excitement (and worries, reservations, and, yes, sometimes tears) of an emptying nest, parents often fail to consider their kids' health insurance in the ensuing chaos. While most colleges and universities mandate student health insurance, those young adults choosing a different path may fall through the coverage cracks. And, navigating health insurance options and necessities can be overwhelming for even the savviest of parents.
Children can generally stay on their parent's health insurance plan until age 26, regardless of whether they live with either parent, are married, are attending school, or are eligible for an employer's plan. That last condition, in particular, is an important one, as it is no longer an option after age 26; if you decline affordable (as defined federally) employer-sponsored coverage later in life, you will not be eligible for the tax incentives that put many policies within financial reach on the Health Insurance Marketplace. In many cases, sticking with a parent's policy makes a lot more sense than an employer-sponsored plan where deductibles and premiums may prove cost prohibitive to accessing care.
Today, young adults have a range of health insurance options and it's important for both you and your child to carefully consider several factors in determining the best course of action.
Cost:
Often, if your plan already provides for other dependents, it may not cost anything additional for you to continue your child's coverage. As such, it would make considerable financial sense for both you and your child to keep things as they are until age 26, thereby avoiding additional deductibles and premiums. Your child might then offset these savings by playing a more responsible role for other expenses.
If coverage does incur an additional cost, it would behoove all involved to research further options. A healthy young adult with minimal prescription and healthcare needs might be able to secure a solid comprehensive policy on the Health Insurance Marketplace (healthcare.gov) with a low deductible and premium, particularly considering available tax credits. Contrarily, a minimal additional cost to keep your child on your plan, which they might then pay to you. Could be far less considerable than their personal costs with a solo policy. Even less expensive would be buying an annual, often called 'short term' health insurance policy. Short term policies typically exclude preexisting conditions, maternity and brand name prescription coverage but come at a steep discount. If those three protections aren't issues of concern for your young, healthy child then consider this type of policy for about a 50% discount.
Policy Provisions:
While keeping your child on your policy might be affordable or free, it may not make sense from a care standpoint. Is your child's primary provider in-network on your plan? If they no longer live nearby, are there in-network options near them? If not, the costs to access care can be considerably higher, regardless of coverage, and result in significantly higher out-of-pocket costs in the long run, whether those pockets are yours or your child's.
If continuing to cover your child isn't an option and no insurance is available to them or you want help weighing the options contact your Yennie & Jones agent.
For insurance questions, call or contact Yennie & Jones Insurance Agency today.
