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When it’s time to ditch your parents’ health insurance

One of the most popular provisions of the Affordable Care Act allows young adults to stay in their parents’ health insurance plan until the age of 26. I was fortunate enough to be covered by my parents’ insurance plan for several years, but will soon be upgrading to a Kiplinger plan.

Some insurers allow adult children to stay on their parents’ plan until the month of their 26th birthday, while others stop coverage on your birthday. Either way, if you are covered by your parents’ plan, you should start looking for alternatives well before the time runs out.

COBRA coverage. You have the option of staying on your parents’ plan after the age of 26 under COBRA (which stands for Consolidated Omnibus Budget Reconciliation Act). The law generally allows a person who quits their job to stay in their employer’s plan for up to 18 months, but young adults who are about to drop out of their parents’ plan are also eligible. You will need to inform your parents’ employer that you want to register with COBRA, and once you do, you will receive benefits for up to 36 months. The only major downside: COBRA is expensive. Many employers cover all or most of the cost of employee health insurance premiums, but when you choose to enroll in COBRA, you (or your parents) will need to pay the full premium. Average premiums for COBRA plans are $ 600 to $ 700 per month, says Karen Pollitz, senior researcher at the Kaiser Family Foundation.

If you work and your employer offers health benefits, their plan is likely to be less expensive than maintaining coverage under COBRA. Turning 26 and losing your parents’ plan coverage is a “qualifying event”, which means you don’t have to wait for enrollment to open (which usually takes place towards the end of the year) to subscribe to health insurance.

Affordable Care Act. If you don’t have health insurance at work, your next stop should be HealthCare.gov. The Affordable Care Act expanded access to health care for all uninsured Americans, including young adults, through the online health insurance marketplace.

In addition, you may be eligible for financial assistance which will significantly reduce the cost of premiums. The US bailout, enacted in March, dramatically increased ACA subsidies, lowering premiums for individuals at all income levels and eliminating them altogether for some households. If your estimated modified adjusted gross income for 2021 is between 100% and 150% of the federal poverty line ($ 12,880 to $ 19,320 for a one-person household), you will be able to purchase enhanced silver-level plans at no cost. . Visit HealthCare.gov and select your state to access the health insurance market. You can also use this tool to determine if you are eligible for Medicaid, which offers health insurance coverage to low-income households.

Coverage for students. If you are attending a college or educational institution, you may be eligible for student health insurance. Student health insurance is often very good, but the quality of coverage varies, says Mina Schultz, ACA’s outreach and enrollment manager at Young Invincibles, a young adult advocacy group. Another option for unemployed students is Medicaid, says Schultz. If you earn less than $ 16,000, you may be able to enroll in Medicaid for little or no cost at all.

If you’re not sure which option is best for you, consider checking out an ACA browser. ACA Navigators are a network of healthcare experts who can help you apply for health insurance and can help you even after you join a plan. You can find one in your area at GetCoveredAmerica.org.

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