Turning 26 is a major milestone, and with it comes a big health insurance change: you're no longer eligible to stay on your parents' plan. If you live in California or nearby states, there are several ways to make sure you don't go without coverage. And if you're outside California, your state may use the federal health insurance marketplace or have its own exchange.
Under the Affordable Care Act (ACA), most young adults can stay on a parent’s health insurance plan until their 26th birthday. After that, you need to get your own plan, either through your job, Covered California, or another option.
1. Covered California and Other State Exchanges
You can apply for an Individual & Family Plan (IFP) through Covered California. You may qualify for subsidies based on income, especially if you’re just starting out in your career. These plans offer strong coverage, including free preventive care and low out-of-pocket maximums.
If you're not in California, you can apply through the federal exchange or your state’s health insurance marketplace if it has its own (like Nevada or Washington). The enrollment process is similar, and income-based subsidies are available nationwide depending on your eligibility.
2. Off-Exchange Private Plans
These are health insurance plans you buy directly from insurance companies rather than through a government marketplace. Because they’re not part of an exchange, they aren’t eligible for government subsidies, but they can still be a good fit for some individuals. Off-exchange plans may offer broader provider networks, more plan design options, and fewer income reporting requirements. They can be a smart choice if you don’t qualify for subsidies or want access to a specific hospital or doctor not available on-exchange. However, it's important to compare carefully, as the costs can be higher without financial help.
3. Employer-Sponsored Insurance
If your job offers health benefits, this can be an affordable and comprehensive options, especially for larger companies with group rate advantages. Plans may offer broader provider networks and access to extras like dental, vision, or pre-tax savings accounts like an HSA or FSA. You can often add dental and vision coverage or enroll in pre-tax savings like an HSA or FSA. Ask HR about enrollment deadlines as you may qualify for a special enrollment period if you're aging off a parent’s plan.
4. ICHRA Reimbursement (if self-employed or contractor)
An Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers, including self-employed individuals, to reimburse employees for the cost of individual health insurance premiums on a tax-free basis. If you're working for a small business, your employer might offer this instead of a traditional group plan. ICHRAs offer flexibility in choosing a plan that fits your personal needs and budget. For freelancers or contractors, setting up an ICHRA can be a strategic way to manage healthcare costs while still accessing quality coverage. Ask your employer or CPA if this is an option in your situation.
5. Medi-Cal
If your income is low, you may qualify for Medi-Cal. California offers expanded eligibility, and in some cases, you can enroll even if you're undocumented.
Losing coverage when you turn 26 is considered a qualifying life event, which means you have 60 days to enroll in a new plan. Missing that window may leave you without coverage until the next open enrollment period.
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