Turning 26? ACA Special Enrollment for Health Insurance
If you’re turning 26 and losing health insurance under your parents’ plan, you’re eligible for a Special Enrollment Period to find new coverage. Learn how to navigate this transition and explore your health insurance options.
Turning 26 is a significant milestone that comes with important health insurance decisions. As you age out of your parents’ plan, it’s crucial to understand your options, from ACA Marketplace plans to COBRA, and how to avoid gaps in coverage. This guide from SelfGood, a leading resource for health insurance information, will help you make informed choices and ensure a smooth transition.
Key Takeaways:
- You lose coverage under your parents’ plan at 26, triggering a Special Enrollment Period.
- You have 60 days before and 60 days after losing coverage to enroll in a new plan.
- Options include ACA Marketplace plans, employer-sponsored insurance, COBRA, Medicaid, and short-term plans.
What Happens When You Turn 26?
When you turn 26, you may lose health insurance coverage under your parents’ plan. This typically happens at the end of your birth month, but it can vary based on the plan’s terms. The loss of this coverage is considered a “qualifying life event,” which triggers a Special Enrollment Period (SEP) that allows you to sign up for a new health plan outside the standard open enrollment period1.
Special Enrollment Period (SEP) Explained
The SEP triggered by turning 26 gives you a 120-day window to enroll in a new health insurance plan—60 days before and 60 days after your coverage ends2. Taking action early is essential to avoid coverage gaps. If you miss the SEP window, you may have to wait until the next open enrollment period, which could leave you uninsured for several months3.
State-Specific Extensions
Some states offer extensions beyond age 26 under specific circumstances, such as being a full-time student or having a disability. Check your state’s regulations to see if you qualify for extended coverage4.
Exploring Health Insurance Options After Turning 26
When you lose coverage under your parents’ plan, you have several health insurance options to consider. Here’s an overview:
ACA Marketplace Plans
The ACA Marketplace offers various plans tailored to different budgets and healthcare needs. You may also qualify for subsidies based on your income, which can significantly reduce your monthly premiums5. To enroll, visit HealthCare.gov, compare plans, and select the one that best meets your needs. Make sure to gather the necessary documentation, such as proof of income and your qualifying life event, to facilitate the enrollment process.
Employer-Sponsored Insurance
If your employer offers health insurance, this could be your most straightforward option. Employer-sponsored plans often provide comprehensive coverage at a lower cost due to employer contributions. Check with your HR department about your eligibility and available plans, and be sure to enroll during the open enrollment period6.
COBRA Coverage
COBRA allows you to continue your current health insurance plan after losing coverage, but at a higher cost since you’ll pay the full premium plus an administrative fee7. This option might be suitable if you have ongoing medical needs that require consistent coverage. Be mindful of the 60-day enrollment window for COBRA after losing coverage8.
Medicaid and CHIP
For low-income individuals, Medicaid offers comprehensive coverage with little to no cost. Eligibility varies by state, but if you qualify, it’s a valuable option. CHIP is available for children and some pregnant women who don’t qualify for Medicaid but still need affordable coverage9. Applications for Medicaid and CHIP can be submitted through your state’s Medicaid office or HealthCare.gov.
Short-Term and Catastrophic Plans
Short-term health plans are temporary and usually less expensive, but they come with significant limitations, such as not covering essential health benefits. Catastrophic plans, available to individuals under 30 or with hardship exemptions, offer low premiums and high deductibles, making them suitable mainly for worst-case scenarios10.
Financial Assistance for ACA Plans
One of the advantages of ACA Marketplace plans is the availability of financial assistance through subsidies:
Premium Tax Credits
Premium tax credits are available to individuals and families with incomes between 100% and 400% of the federal poverty level. These credits reduce your monthly premium costs and are applied automatically when you enroll through the ACA Marketplace11.
Cost-Sharing Reductions
If your income is below 250% of the federal poverty level, you may qualify for cost-sharing reductions, which lower out-of-pocket costs like deductibles and co-pays. These reductions are available only with Silver plans on the Marketplace12.
How to Apply for Subsidies
To apply for subsidies, you’ll need to provide income details during the enrollment process on HealthCare.gov. Tools like HealthSherpa can help you determine your eligibility and estimate your savings13.
Final Thoughts
Turning 26 and aging out of your parents’ health insurance plan is a significant transition that requires careful planning. By understanding your options and taking advantage of the Special Enrollment Period, you can secure the coverage you need without a lapse. Whether you choose an ACA Marketplace plan, employer-sponsored insurance, or another option, it’s important to act early and make informed decisions to protect your health and financial well-being.
Frequently Asked Questions
What happens if I miss my SEP window?
If you miss your Special Enrollment Period, you may need to wait until the next open enrollment period to obtain health insurance, potentially leaving you uninsured for several months. In some cases, you might qualify for another SEP due to different life events, like moving or losing other coverage.
Can I stay on my parent’s plan after turning 26?
In most cases, no. However, some states offer extensions if you’re a full-time student or have a disability. It’s essential to check with your insurance provider and understand your state’s regulations.
How does turning 26 affect my mental health coverage?
Losing coverage under your parent’s plan may impact your access to mental health services. Ensure any new plan you consider includes mental health coverage, as required by the ACA. Compare plans carefully to ensure they meet your mental health needs.
Sources:
- Healthcare.gov. (n.d.). Special Enrollment Period. Retrieved from https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/
- HealthSherpa. (n.d.). What is a Special Enrollment Period? Retrieved from https://www.healthsherpa.com/blog/special-enrollment-period
- Centers for Medicare & Medicaid Services. (n.d.). What to do if you miss the deadline to enroll in a health plan. Retrieved from https://www.cms.gov
