What Young Adults Should Know about Healthcare Coverage
Today’s video is geared to educating young adults about healthcare coverage. Young adults have many more options than they used to have prior to the Affordable Care Act reforms that took effect in 2014. Prior to that, one’s ability to stay on a parent’s plan beyond age 18 was tied to full-time student status and what was considered full-time varied and was often a subject of dispute.
Today, under federal law, young adults are allowed to stay on a parent’s plan until they are 26 and, in some states, with fully insured plans, even longer. There are still pitfalls, of course. If a young adult on a parent’s plan marries, coverage is not extended to the spouse. Similarly, if a young adult under 26 has a child and is covered on a parent’s plan, coverage is not extended to the grandchild and depending on the plan, the cost of the delivery of the child may not be covered. So, if you are on a parent’s plan and become pregnant or plan to become pregnant, please verify coverage for maternity care.
We have summarized below the issues we would like all young adults to understand.
Coverage is not the same
There are different products, networks and rules that matter. The field also abounds with scamsters and limited options like short-term coverage or Christian Co-op Plans. Christian Co-op plans are not insurance. Always aim to be covered by an Affordable Care Act-compliant plan for the protection that it provides.
Enrollment rules are strict and unforgiving
Although many exceptions to the strict enrollment rules associated with the individual market were made over the past year due to COVID-19, they remain exceptions. There is typically a time frame or window in which you are entitled to acquire coverage and you must act within that time frame.
Coverage through employment
If you work for a company that provides healthcare coverage as a benefit, you should be eligible for that coverage if you work 30 or more hours per week.
Coverage options when group coverage ends
If you lose group coverage through your own employment, you will be offered COBRA. COBRA is an acronym but is the program which provides a temporary extension of group coverage at your expense. Under federal law you are eligible for up to 18 months of COBRA as long as the company continues to exist.
If you lose group coverage because a parent loses coverage or you age off the plan, you will also be offered COBRA. Under federal law, as a dependent, you will be eligible for up to 36 months of COBRA coverage.
If the employer from which coverage is lost is under 20 employees, state COBRA laws, usually referred to as “mini-COBRA” apply. Contact your State Insurance Department to determine the time frames for “mini-COBRA” eligibility or conduct an online search for more information.
Whenever you are offered COBRA continuing coverage, medical and dental benefits are elected separately so just know you have the right to waive one and take the other should you choose to do so.
Individual coverage is coverage you pay for yourself. You should shop for it on healthcare.gov or your state-based exchange to understand if you are eligible for a premium tax credit. You have to buy coverage on healthcare.gov or your state-based exchange to benefit from the premium tax credit. If you buy coverage directly through the insurer, you will pay the full premium.
Open enrollment in the individual market will begin again on November 1, 2022 for a January 1, 2023 effective date unless you have an event that allows you to enroll off-cycle. To our knowledge, New York residents are the only people still able to enroll in individual coverage without a qualifying event at least through the end of March.
Medicaid is the program for the lowest income Americans. If you apply for coverage on exchange and are very low income, you will likely be automatically enrolled in Medicaid and will not have an option of “paying up” for the options available to those with a higher income. This can be complicated because some states have not expanded Medicaid eligibility under the Affordable Care Act. You can research this information online or contact your State Insurance Department or healthcare.gov for information. If your state has a state-based exchange, the state has expanded Medicaid and if your income is less than 138% of the federal poverty level, you will be eligible for Medicaid.
The Affordable Care Act reforms of 2014 required colleges to either offer ACA-compliant coverage or to not offer coverage. This is an option for many to consider because it is often more affordable than other options. Of course, if you are already on a parent’s plan and it covers you where you are in school, you may not need to consider coverage through your college. If you take coverage offered through a school, be aware of the end date of the plan upon graduation and plan ahead to replace that coverage.
The environment is challenging
Know that coverage in the United States is complex and often the relationship between providers of service and the insurer is adversarial and difficult. In order to maximize the value of your coverage, you must learn enough about coverage to be an effective consumer.
If you have several options
If you have several options for coverage other than remaining on a parent’s plan, like a college plan, COBRA, or individual coverage, know that coverage as an individual in most states will be age-rated and thus typically less costly than COBRA for young people. At the same time, any time you consider options, also consider the product, network, and rules associated with various options.
In summary The Affordable Care Act reforms of 2014 made coverage options for young adults more equitable. It was ridiculous for young adults to no longer be eligible to remain on a parent’s plan at 19 unless they were full-time students. It left many young people terribly vulnerable and, in most states, medical underwriting was required to obtain individual insurance and many could not qualify.
Today young people have more options but options can be complicated to evaluate. We urge everyone to learn more about our complex healthcare system and hope you’ll encourage young adults to learn more by reading this material and watching our video!