When your kids are young, there’s a surefire way to get them health insurance coverage: add them to your own plan. But when they become adults, it’s not as simple. They may no longer be eligible for your plan — for instance, when they turn 26--or there may be better coverage options available to them through their college or employer. .
How do you know what is right for your family? Here are some things to consider:
- Insurance premiums: Find out how your premium will (or won’t!) change if you take your child off your family plan. If this is your only child or last child, your premiums might drop drastically if you help them find separate coverage. Compare any change in your premiums to the cost of premiums your young adult might have to pay under another plan.
- Network reach: Think about where your child will be located this year. Will your child have access to in-network providers if they move to a new city? What if they travel? Paying for out-of-network care is more expensive and can add up quickly, so keep this in mind.
- Out-of-pocket expenses: For each of the plans you’re considering, factor in how you could use an HSA, HRA, or FSA. You can:
- Use your FSA or HRA to cover expenses for your child up to age 26 (regardless of whether they are on your health plan)
- Use your HSA to cover expenses for a tax dependent (regardless of whether they are on your health plan)1
- Help your child open their own HSA if they are not a tax dependent but they are covered under your HSA-qualified health plan — and you can contribute to their HSA
- Help your child find a plan that allows them to set up their own HSA — and you can contribute to their HSA
- Coverage: Consider any upcoming medical needs. Does your child need their wisdom teeth out or have a costly, ongoing prescription they need to pay for? Are there any appointments outside of routine/preventive checkups they may need? If so, giving them more coverage or starting an HSA for them might be beneficial. When considering options, make sure to pay close attention to whether prescription medications count toward the deductible.
Did you know?
You may be able to start a health savings cushion for your child by setting up an HSA in their name. This applies to young adults who:
- Are between ages 18 and 26
- Are not claimed as a dependent on your taxes
- Are covered under your HSA-qualified family HDHP as of the first of the month
- Do not have any other type of medical coverage or Medicare
Start them off with a little or a lot — if your child is covered under your family health plan, they can contribute up to your family maximum. Learn more.
Explore your plan options
- New-employer benefits: Your child’s job may offer health insurance. If so, before signing up, do a side-by-side comparison of your family plan and the employer plan. Which one offers the better value? Be aware that it could be beneficial to have your child on their own plan for their primary coverage and on your plan for secondary. Especially if you have more than one child on your family plan, it may not cost you any more to keep them on your coverage. When comparing costs, be sure to look not only at premiums but also at whether their employer will contribute to an HSA.
- Your existing plan: By law, if your plan covers children, you can keep them covered until they turn 26.
- Health insurance marketplace: If your child doesn’t have a school- or employer-provided plan, or if they’re living in a different state than you, the marketplace might be something to consider. They can start an application to see their options.
- Student plans: If your child is attending college, check out if coverage is offered by their school. Is financial aid available to help cover the cost of the plan? This type of coverage may or may not qualify as high-deductible health plan (HDHP) coverage. However, if it does, your child may be able to open their own HSA.
Not sure what the year will bring? You should be able to work around any changes.
Be aware that a change in dependent coverage also means you’ll be able to make changes to your own plan. For example, if your child turns 26 and loses their coverage or gets new coverage through a new job in the middle of the year, you’ll be able to change your health plan too. Learn more.
Once you’re ready to bring your child into the discussion, check out our Conversation Guide.
We also have a piece designed specifically for your children to read, Now's the Time to Figure Out Your Health Insurance, that can be shared online or printed for them.
1.You can only use your HSA for their costs if they are a tax dependent.