Q. I am a 21-year-old dependent living with my parents and going to school full time. I’m not married and have no kids, so do I apply for health insurance as a household of one and list only my own income? Or do I have to be on my parents’ insurance?
A. You can get your own health insurance policy, but since you’re counted as a dependent on your parents’ tax return, your household income for subsidy purposes will include their income as well, and you’ll be counted as a household of three (or more, if you have siblings who are also dependents on your parents’ tax return).
If you are a household of three, subsidy eligibility in 2021 extends up to an income of $86,880 (the 2020 federal poverty guidelines are used for plans with 2021 effective dates, as the open enrollment period for 2021 coverage occurred in 2020, before the 2021 federal poverty level guidelines were published). But subsidy eligibility also depends on the cost of health insurance plans in your area.
The family can apply for one health insurance policy with all of you on the same coverage, or you can apply for your own policy. But either way, when it comes to calculating subsidy eligibility, you and your parents are considered one household for tax filing purposes, since they claim you as a dependent on their return. So your combined household income would need to be listed, along with the total number of people in the household.
The same is true for your parents if they are applying for their own health insurance plan for just the two of them; they would still list their household as three people (or more, if they have other dependent children), and include your income along with theirs when applying for premium tax credits.
Even after you’re no longer your parents’ tax dependent, you’ll be able to stay on their health insurance until you’re 26, if that’s what works best for your family.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.