How Long Can I Remain Under My Parents’ Health Insurance?

The rules that govern health insurance in the United States are undergoing tremendous change. With the 2009 passage of the Affordable Care Act, often known simply as the "Healthcare Law," health insurance companies and healthcare providers have had to make some major changes to their cost structures and operating procedures. The law is in the process of a multi-stage phase-in that will conclude by 2015. Several of its key provisions are already in effect.

One of the most consequential of these provisions is the requirement that insurance companies make arrangements to provide coverage for young people who wish to remain on their parents' existing healthcare plan. The only limit on this right to coverage concerns the age of the covered party: Individuals can't secure coverage from their parents' plan after turning 26. At that point, a formerly-covered individual would need to purchase their own healthcare plan, join an employer-sponsored plan, or pay a fine in exchange for living without health insurance.

There are several caveats to this privilege. First, covered children generally must live in the same state as their parents to ensure maximum coverage. Although insurance companies are still legally required to make arrangements for parents and children who live far apart, the state-centric nature of the health insurance industry makes this difficult in practice. In addition, several states remain locked in political battles to limit the Affordable Care Act's scope and slow its implementation. Some state governments may tolerate insurance companies that skirt or ignore this coverage rule.

Young people are also entitled to health insurance coverage under the unrelated COBRA law. COBRA enables unemployed individuals to continue their coverage under their former employer's healthcare plan. "Dependent children" of laid-off workers can take advantage of their parents' COBRA benefits even if a covered parent dies or separates from a non-covered parent.

Since most of the legal challenges to the Affordable Care Act have now wrapped up, the law appears on course for full implementation by 2015. Students who worry about their ability to find employer-sponsored health insurance in a tough economy can plan ahead and rely on their parents' insurance for several years after graduating from college.

However, the law's full implementation will bring some challenges as well. Since health insurance coverage will be mandatory beginning in 2014, cash-strapped young people who are no longer eligible for parental-plan coverage will have to make arrangements to buy individual insurance.

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