Should you keep your adult kids on your health insurance

But like most health decisions, it’s not that simple. And with open enrollment around the corner for many Americans, now is a good time to dig into whether having your adult kids skip paying for their own health insurance is the best financial move. 

Nearly three-quarters of Gen Z’s parents (72%) pay for their kids’ health insurance, according to a poll published earlier this year of nearly 1,000 U.S. parents with at least one child over the age of 18. That high level of support makes sense given that kids can typically stay on their parents’ health insurance until they turn 26, thanks to the Affordable Care Act. As part of this legislation, employers, plans, and issuers generally are required to offer dependent coverage for adult children. 

Even about 17% of the parents of millennials (ages 26-41) still have their kids on the family health insurance plan. That will likely decrease substantially next year when most millennials completely age out of the “under 26” provision. That said, several states, including Florida, New Jersey, and New York, allow families to get a rider to extend coverage for unmarried adult children past age 26.   

The cost of the extra health insurance isn’t exorbitant, depending on the plan structure—parents spend an average of about $157 per month to keep their kids on their health plan, according to the survey. 

But while it might be tempting for adult kids to skip shouldering the health insurance costs for now, staying on a parents’ plan is no guarantee that medical expenses will be lower overall. Especially if your adult children live in another state or region, and your insurance is a health maintenance organization (HMO) type of plan, an exclusive provider organization (EPO), or other limited-network plan. 

“If you’re considering staying on your parent’s plan instead of getting your own coverage, it’s important to consider cost—and coverage,” says Kim Buckey, vice president of client services at employee benefits program provider Optavise (formerly known as DirectPath).

What’s covered and what could be missing

For some families, continuing to have their adult children on their parents’ health insurance works out just fine. Typically, Americans in their 20s are healthy, and having a some coverage is better than none. Plus, health insurance plans do typically have to pay for emergency room visits under the ACA, even for out-of-network emergency services. But even with that coverage, the costs of an ER visit easily can be in the thousands. 

But emergency coverage doesn’t extend to regular doctor’s visits, therapists, urgent care, lab work, and even prescriptions. All of these services may be billed at out-of-network rates—which may mean little to no coverage. As a result, adult children may incur significant out-of-pocket costs to get basic medical services and preventative care.  

There are also limitations on what medical procedures are covered for adult children. Not every plan…