Monday, February 1, 2016

Health Insurance Options for Young Adults

What are the options for insurance for young adults in the age of Obamacare? Here is brief overview of common options for those of the millennial generation: 

Employer-Sponsored Health Insurance Coverage
 Any young adult who is a full time employee may potentially have access to a group plan that is offered by the employer.  This is normally a desirable option since most employers pay a portion of the employee’s premium.  One of the downfalls to this type of insurance coverage is the group rate could be much higher than an individual would normally pay for themselves.  That is how group coverage works.  It shares the cost of the entire group among all. This type of coverage fulfills the individual mandate. (What is the Individual mandate? In 2014 the Affordable Care Act included a mandate for all most all individuals to have health insurance or pay a penalty for noncompliance.)

     Parent's Health Insurance Plan
Young adults may still remain on their parent's health insurance plan until the age of 26.  Even those with access to health insurance coverage through an employer may remain on a parents plan through their 26th birthday.  This type of coverage fulfills the individual mandate as long as the parent's plan fulfills the mandate.
     The Health Insurance Marketplace
Millennials who do not have access to the previous 2 options listed above may shop on the federal exchange.  (State exchange for 13 states)  This is commonly referred to as Obamacare.  Young adults whose income falls between 100 and 400 percent of the federal poverty level may be eligible for a premium tax credit. This type of coverage fulfills the individual mandate.

     Non-Exchange Health Insurance Plans
Young adults whose financial position disqualifies them from being capable of receiving premium tax credits may consider buying individual major medical insurance direct from a carrier or through a broker.  These plans must adhere to the Affordable Care Act’s requirements for minimal essential coverage. 

The term exchange versus non exchange:  When somebody is going on the exchange they are applying for healthcare coverage through or a 3rd party platform.  Most of the time this person is looking for a tax credit.  Non-exchange plans are similar to exchange plans in that they still adhere to the metallic levels (Bronze, Silver, Gold, Platinum, and Catastrophic) the difference being that the client is not attempting to receive a premium tax credit. This type of coverage fulfills the individual mandate.

Student Health Insurance Plans
Some major colleges offer health insurance coverage for their students.  While a young adult can remain on their parents plan they may be considered out of network if they are attending school out of state or region.  Which would then require them to travel home in-order to receive care. (Unless life threatening, emergency rooms will not turn you away)
This type of coverage may or may not fulfill the individual mandate the student would need to check with the University or the insurance plan.

For young adults that make under the qualifying amount for going on exchange Medicaid is an option.  Medicaid provides low-cost or free health insurance for low- income individuals.  In order to be on Medicaid an individual will need to apply through the marketplace.
This type of coverage fulfills the individual mandate.

Health Care Sharing Ministries
An individual can apply to join a Health Care Sharing Ministries plan. (HCSM)  These type of plans are considered to be a non-insurance related product.  The main difference between these options versus the other options is the HCSM plans involve underwritings.  In other words, if you as the client are extremely sick or have high health risks the HCSM can turn you down or charge steeper premiums opposed to a healthy prospect the same age.

Justin Else 

1 comment:

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