Should You Keep Adult Children on Your Health Plan?

In the world of parenting, conventional wisdom calls for children to achieve independence and take financial responsibility as soon as possible. However, keeping them on your insurance plan may be the best way to help them get a step ahead.

In the struggling post-pandemic economy, inflation has caused the price of housing, gas, food, automobiles and other goods to soar. Many young adults also face credit card debt and monthly rent payments totaling more than 50% of their take-home pay.

The Affordable Care Act allows young adults to stay on a parent’s plan until age 26, even if they’re employed by a company that provides health coverage, are married or have children, and are no longer living at home.

Before making a decision, it is best to compare the cost of your adult child getting coverage through their own employer. Many times, the combined cost of premiums, deductibles and other out-of-pocket expenses can be substantial.

For example, according to the 2021 Employer Health Benefits Survey by the Kaiser Family Foundation., annual premiums for employer-sponsored family health insurance were $22,221 for families and $7,739 for single coverage. On average, most covered workers contributed 17% of the premium for single coverage and 28% for family coverage. This translates into $1,299 for single coverage and $5,969 for family coverage.

The financial burden of deductibles has been increasing steadily. According to the KFF report, in 2021, 85% of covered workers had a deductible in their plan compared to 74% a decade earlier. On average, workers at companies with fewer than 200 employees faced deductibles that were 70% higher than those at firms with at least 200 employees ($2,379 vs. $1,397). Also, those in lower-income families spent a greater share of their income on health costs than those with higher incomes.

Keeping adult children on your health insurance plan can relieve some of their financial pressure, plus enable them to build up an emergency fund or retirement account. To make things easier, perhaps they could share in the expenses, such as covering the costs of deductibles and copayments. The best advice for parents is to come up with a plan that works best for their family.

For information on how to get or stay on a parent’s health insurance plan, visit

Pacific Federal is a Zenith American company and subsidiary of Harbour Benefit Holdings, Inc.