When you are young, you look forward to different changes in life. One change is when you head to DMV to get your license, and another to be able to vote. But one change in life that you may be ignoring is your own health insurance coverage. And though this task can be a little frustrating, the Affordable Care Act has made it easy for you.  


Here are seven health care tips to ease your transition as 26 approaches: 

Tip 1: You can remain on your parent’s insurance until you turn 26.

As long as your parents have either a plan on the Marketplace or an employee-based plan, you can stay on their coverage. But once you turn 26, it is your responsibility to purchase your own plan.   

Tip 2: You can still remain under your parent’s plan if you are under 26 and married.

Providing you meet the qualifications, through your parent’s insurance plan, you can remain on their plan even if you are:

  • Married 
  • Not living with your parents 
  • Attending school 
  • Not financially dependent on your parents 
  • Eligible to enroll in your employer’s plan 

Tip 3: You have options for health insurance.

When you come off of your parent’s health coverage, you are eligible for a special enrollment period to purchase a health plan through the Marketplace. Be aware that you only have 60 days after you turn 26 to take advantage of the special enrollment period. Good news - once you choose your health plan, it can start on the first day of the month. You also have the option of enrolling in a health insurance plan via your employer.    

Tip 4: There are ways to make it affordable.

Premium Tax Credit (PTC): A PTC is a refundable credit that can be claimed on your tax return to assist with out-of-pocket expense towards insurance premiums. The PTC is based on a sliding scale. The higher your income, the lower the credit to help cover the cost of health insurance. You can only receive this credit if you have purchased through the Marketplace.

Advanced Premium Tax Credit (APTC): the APTC reduces what you pay to your insurer in advance. If your annual income exceeds 400% of the FPL, you will have to return the total amount of credits received.

Tip 5: You don’t have to purchase health coverage.

However, unless you qualify for an exemption, you may have to pay the penalty if you are not insured.  

The penalty for not having coverage in 2015 is the higher amount of 2% of your household income or a flat fee of $325 per person, whichever is greater. For 2016, it is 2.5% of your household income or a flat fee of $695 per person, whichever is greater.   

Tip 6: You are required to file a tax return.

Regardless of your income, you are required to file a tax return. Even if you don’t have any health insurance coverage and you pay your own medical costs, filing a tax return is required.    

Tip 7: If your birthday is in December, you still have time.

Just an FYI - you only have a 60 day window after you turn 26 to take advantage of the special enrollment period through the Marketplace. You may apply for an exemption form if you are uninsured for no more than two consecutive months. Nevertheless, you should enroll in coverage ASAP.


To find a Liberty Tax® ACA Advisor at your local Liberty Tax® office, call 800-673-8600 or visit www.healthcaretaxinfo.com.

Disclaimer: Tax Lounge is an informational source for industry news and related topics. We take every effort to provide honest and accurate tax information, but this information should not be a substitute for professional tax advice. Use our office locator to find your local tax office.