How You Can Help Your Adult Child Navigate Health Insurance

The Affordable Care Act (ACA) allows adult dependents to remain on their parents’ health insurance plans until they reach the age of 26, in most cases. So, what happens when your adult child reaches that age and must obtain their own health coverage?

Here’s a simple guide to helping your adult children navigate and understand health insurance plans and options.

When your adult child becomes ineligible

Since the ACA changed the rules for adult children, many have remained on their parents’ health plans until they reach age 26 since the law went into effect. In many cases, the coverage extends to adult children who reach the age threshold even if they get married, have children, attend school, or have the option to obtain job-based coverage of their own.

However, your child may choose to obtain their own health insurance coverage when they turn 26 or if they relocate and need coverage in their new location.

When to begin looking

It’s helpful to begin looking at and comparing health insurance plans near the time when your child will no longer be eligible for coverage under your plan. You and your child can browse healthcare.gov to view plans available to those who don’t have coverage options through their employment or parents.

However, job-based coverage is typically the most affordable option, so if your child has a job that offers health insurance as a benefit, it usually makes sense for them to enroll on that plan.

Share your health insurance plan with your child, including how to navigate and interpret your online member portal that shows your deductible, out-of-pocket expenses, and Explanation of Benefits (EOBs), among other features. By showing your health plan you’re your benefits, you can provide a great learning experience.

Related: How to Find Health Insurance: Ask These 5 Questions

Understanding health insurance terms

If your adult child has never handled their own insurance claims or coverage in the past, the switch to their own health plan may be confusing. Take some time to sit down with them and explain the commonly used terms and concepts, such as copayments, deductibles, coinsurance, covered care, and out-of-pocket maximum.

• Copayment: Also called a copay, this is the amount you pay out of pocket for specific treatments and visits. For example, you might have a $30 copay for primary care (visits to your primary care provider), a $40 copay for specialty care (visits to specialty care providers), and a $100 copay for emergency department visits.
• Deductible: The amount the covered beneficiary pays out of pocket before the health insurance company begins paying for covered services. If you have a $500 deductible on your plan, you would pay for the first $500 of covered healthcare services.
• Coinsurance: This is the percentage of covered costs you are responsible for paying out of pocket after you’ve paid your deductible. If you have an 80/20 health plan, this means that your coinsurance amount is 20% of qualified expenses, after the deductible is met.
• Covered care: What your plan covers and will pay for, including office visits, surgical procedures, hospital stays, and other medically necessary services. Elective care is not covered and usually includes treatments that are deemed medically unnecessary or cosmetic in nature.
• Out-of-pocket maximum: The maximum amount the beneficiary would have to pay out of pocket cost-sharing during a plan year.

Health insurance is often confusing, especially to those who haven’t dealt with claims and coverage in the past. As your adult children obtains their own health coverage, this guide can help you assist them through the transition and help them better understand what to expect.

Related: 3 Common Misconceptions about Health Insurance