My 26th birthday is next week and I will lose coverage under my parent’s plan at the end of this month. Open Enrollment has closed. What do I do now?
You should act now to review your coverage options and sign up for new coverage. You may have more than one option.
If your parent’s plan was offered by an employer with more than 20 workers, you will probably be offered COBRA. This is an option to continue coverage under the plan for up to 36 months. COBRA coverage is typically an expensive option because your parent’s employer is no longer required to contribute to the premium, but it may be important option for some young adults, for example, if you are currently in treatment for a condition and prefer not to change coverage now.
You should have or will soon receive a notice from your parent’s plan that your dependent status is about to end and informing you of your right to elect COBRA. You have 60 days from the latter of that notice or the date dependent coverage ends to elect or decline COBRA coverage. If you elect COBRA, you have up to 45 days to pay the first premium (COBRA coverage will be effective on the first day after your dependent coverage ended, so the first premium will cover the time retroactive to that date.) If you don’t make the first payment on time, your COBRA election will not take effect.
Once you elect COBRA and pay the first premium, you will not be eligible to apply for a Marketplace plan with tax credits until the next Open Enrollment period. Even though COBRA lasts 36 months, you do have the option during each Open Enrollment period to drop COBRA and apply instead for subsidized Marketplace coverage.
The Marketplace is another option to consider. Premium tax credits subsidize the cost of Marketplace coverage if your income is between 100% and 400% of the federal poverty level, so for many young adults, this option may be more affordable. Generally people can only apply for Marketplace coverage during Open Enrollment. However, loss of dependent status under your parent’s plan is a qualifying event that makes you eligible for a special enrollment period (SEP). Your SEP lasts 60 days from the date of your qualifying event (the day your parent’s coverage ends) but when the coverage loss can be anticipated, you can also apply for new coverage up to 60 days before your qualifying event. Acting early makes it more likely you won’t have a gap in coverage.
You can apply for Marketplace coverage on your own or ask for help from a Navigator or other Marketplace assister program. Indicate on the Marketplace website that you are applying for coverage during a SEP and make your plan selection. In federal Marketplace states, you will be required to provide proof of your qualifying event before your new coverage will take effect. For example, if you were also eligible for COBRA under your parent’s plan, submitting a copy of your COBRA notice can document your eligibility for the SEP. Healthcare.gov will give you 30 days from the date you select your new plan to provide proof of your other coverage loss. It is very important to act quickly to complete this verification process. If you do not submit the required documentation within 30 days, your plan selection will be cancelled and you will no longer be eligible for the SEP.
Finally, if your income is very low, you might qualify for Medicaid. Medicaid is open for enrollment year round and, in more than half of the states, will cover adults with income up to 138% of the poverty level (about $16,394 for a single person in 2017.) You can also apply for Medicaid through the Marketplace and can get help with your application from a Navigator or other in-person assistance program.