How long can you remain on your parents' private health policy?

Is it time to fly solo?

19 August 2024 3 minute read

Navigating the world of private health insurance is a rite of passage. Most of us stay on our parents’ cover into our twenties if we can, but there are some limits when it comes to staying on your parents’ health policy that you probably need to be aware of.

So here’s a guide to follow, whether you're a young adult wanting to make sure you’re covered, or a parent who wants to ensure your adult kids get the best health cover.

First things first: some definitions

How long you can stay on your parent's health policy depends on whether you're a student dependant or a non-student dependant. So, what does that actually mean?

What is a dependant?

For the purposes of private health insurance, a dependant, opens in a new tab is usually defined as an unmarried child under the age of 31, who is financially dependent on their parents. This can also include stepchildren and adopted children.

What is a student dependant?

At nib we define a student dependant as:

Someone aged 21 to 30 (inclusive)
They’re studying full-time (as long as it is deemed full-time by the institution)
They’re not the policyholder or a partner of someone with a policy
They’re not married or in a de facto relationship.

You can stay on your parents' policy as a student dependant until you complete full-time studies or turn 31, whichever comes first, provided you meet all the specified criteria. This is awesome news if you've decided to dive into tertiary education – now health insurance is one less thing you have to stress about.

What is a non-student dependant?

If you're between 21 and 30 (inclusive), are not a policyholder, aren't studying full-time and aren't in a married or de facto relationship, you can still be covered under your parents' health insurance as a non-student dependant. As long as the policyholder agrees, you can stay on their policy for an additional fee they pay as part of their premium.

If you're in a transition phase, finding your independence but needing some support, staying as a non-student dependant ensures you have continued health coverage during this stage of your life.

What age are you no longer on your parents' policy?

If you are a student dependant or a non-student dependant, you can stay on your parents' private health insurance policy until the day before you turn 31. This is a big win if you're thinking about moving out, studying, or just starting a new career and aren't quite ready to take on the cost of your own health insurance.

How much does it cost to stay on your parents' cover?

The cost to add a dependant to an existing policy is usually a small percentage of the overall premium. As a parent, you can relax a little easier knowing your child is covered during this exciting/scary/whirlwind time of their lives.

How much could you save?

Sure, staying on your parents' policy might save you a bit of cash, but if you stay as a student or non-student dependant, you won’t be eligible to receive age-based discounts, opens in a new tab.¹ Plus, if you're over 21 and not a full-time student, you might have to pay the Medicare Levy Surcharge, opens in a new tab (MLS).² To be exempt from the MLS, opens in a new tab, you’ll have to take out your own hospital policy, opens in a new tab.

Do I need my own health cover?

It might be tempting to drop your private health insurance once you come off your parents' cover—who doesn’t love a bit of extra cash in their pocket week to week? But keeping your cover can save you in the long run.

While Australia is fortunate to have a great public healthcare system, Medicare doesn’t always cover the cost of your health needs, which could leave you with hefty out of pocket costs for certain treatments and services if you decide not to

To learn more about what Medicare doesn't cover, visit: What does Medicare not cover?, opens in a new tab

To dodge the MLS, you need to get your own hospital policy.² And don’t forget, if you wait until after your 31st birthday to get hospital cover, you'll pay an extra 2% on your premium for every year you're over 30 (to a maximum of 70%). This is called Lifetime Health Cover, opens in a new tab (LHC) loading and it sticks around until you've had hospital cover for 10 continuous years.³

So, thinking ahead and getting your own policy could save you big time in the future.

What if you want your own health cover?

Thinking about getting your own health insurance? Here are some things to keep in mind.

First, choose a policy that fits both your healthcare needs and your budget. Do you want coverage for essentials like dental surgery and emergency ambulance, opens in a new tab services? Or are you looking for something more tailored, such as coverage for bone, joint, and muscle care if you’ve been active in sports or have specific health concerns? Explore the Hospital, opens in a new tab benefits you can get with nib.

Don't forget about waiting periods, opens in a new tab that might apply before you can claim certain services. If you’re an nib member transitioning from your parents' policy to your own, you have 30 days from when you're removed from your parents' policy to contact us and set up a new policy. If there's a gap in your cover, even for just one day, you’ll be treated as a new member and all waiting periods will kick in.

For continuity, new policies can be backdated up to 30 days, but you'll need to pay for that period. So, get in touch with us, opens in a new tab quickly to keep things running smoothly and avoid any gaps in your coverage. If you want continuous coverage, your new policy needs to start the day after you left the old one, and you’ll need to pay for any days you missed.

¹Eligible members must be aged 18-29 and not a dependant under the policy. Discount calculated at 2% for each year an eligible member is aged under 30, to a maximum of 10% for 18 to 25 year olds. Not available to dependents on the Policy. If you have a partner on the Policy, the total discount will be an average of your individual age-based discount. Discount applies until age 41, and reduces by 2% per year until removed. Visit the website for more detail.

²If your income is over $97k for singles ($194k for couples/families) and you take out and maintain Hospital cover for the full financial year, you could avoid paying an extra 1% to 1.5% in tax via the Medicare Levy Surcharge (MLS). Visit the Australian Tax Office website, opens in a new tab for specific rules for calculating income for MLS purposes. This information is accurate as of 1 July 2024. See the ATO website for changes that may be made to income tiers from time to time.

³Lifetime Health Cover (LHC) is a Government initiative aimed at encouraging people to take out private hospital cover earlier in life, and maintain it. If you don’t take out private hospital cover before 1 July after you turn 31, you’ll pay a 2% loading on top of your normal hospital premium for each year you don’t have hospital cover (up to a maximum of 70%). The loading applies for 10 years of continuous hospital cover. For every year you put off signing up for hospital cover, another 2% will be added. So if you wait until you’re 40, you’ll pay 20% more than someone on the same cover who joined when they were 31.