Options to Access Health Insurance for Young Adults

With the requirement of the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, that every American purchase health insurance or face a tax, there are many young adults that will be looking to access health insurance for the first time in their lives.  There are so many options out there, it can be difficult to choose which is the best way to cover them and their families.  With that in mind, here are some of the best ways to access health insurance that is comprehensive and affordable.

An Employer’s Plan

The Affordable Care Act expanded the eligibility requirement of group plans.  Under Obamacare employers must offer medical coverage to all of their full-time employees, defined as employees working at least 30 hours per week.  If the employer refuses, they will pay a fine.

There are some formulas to determine the hours an employee works, but as long as a worker meets the 30 hours per week mark they will be offered the same coverage options as everyone else.

In addition to being offered coverage, the law requires that the insurance be affordable.  An employer cannot charge more than 9.5% of an employee’s monthly salary to access health insurance at the workplace.  If more than 9.5% is kept out of a paycheck, the employer will face a fine.

A Parent’s Plan

Another big advantage of Obamacare is the requirement that children be allowed to enroll in a parent’s plan until age 26.  Before the legislation was passed it was up to the insurance plan to decide how long children could be covered.  Now, a dependent can be enrolled long enough to give him or her time to establish their own means for paying for a medical insurance plan.

A parent’s plan can be an inexpensive way to access health insurance since many employers subsidize the cost of children on a plan.  If another child is already enrolled, then there usually is no extra cost to add another.

Health Insurance Marketplaces

Obamacare established health insurance marketplaces, online sites designed to help individuals and small businesses access health insurance with ease.  The marketplaces, also called exchanges, will offer 4 levels of plan design from various health insurance companies.  The exchanges are the responsibility of each state, and some states have built their own exchange.  Some others are sending their residents to a federal exchange.

If someone does not have coverage offered at work, earns less than 400% of the federal poverty level, and purchases insurance on the exchange, they will be eligible for tax credits to help offset the cost of the premium.

Individual Insurance

If group insurance and the health insurance marketplaces are not a viable option, there is still the possibility of finding individual insurance on your own.   There will be some legwork involved, as it is not necessarily easy to sort through plan designs from different companies.  However, you will have more options as to which level of insurance plan you would like than you will on the exchange. The coverage bar required to satisfy the individual mandate is not very high, and you can find plans that meet the requirements at a low price, albeit without much coverage.

If you do not want to find individual insurance on your own, you can hire a broker to access health insurance for you.

Medicaid

Before 2014, it was hard for adults in many states to qualify for Medicaid.  However, Obamacare expanded Medicaid to make it much easier to be eligible for assistance through this program.  Like the exchanges, Medicaid is administered through the states, so check with your state’s Medicaid office for more information.

No Pre-Existing Condition Exclusions

Being able to access health insurance is much easier post-2013 than it was before due to the fact that insurance companies cannot deny coverage to people due to pre-existing conditions.  This has made it less complicated to find a quality plan at a reasonable price.

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Top 5 Ways to Get Low Health Insurance Rates

Finding low health insurance rates can seem like a futile exercise.  There are so many things to consider that it can get overwhelming very quickly.  However, there are several ways to keep from spending too much for quality health coverage.  Unfortunately, you can’t get any younger, but here are 5 other ways to get low health insurance rates.

Increase Out of Pocket Limits

Insurance is handing the risk of a loss over to someone else in exchange for paying a premium.  The more risk you take on for yourself, the lower the premium that you will pay.  In the health insurance world, you do this by choosing a plan that has high out of pocket limits.  Increasing things like deductibles and copays will mean that you will pay more if you need medical services, but the monthly health insurance rates you pay will be lower.

Join Your Employer’s Plan

If your employer offers a plan and you are eligible, it can make sense to join their plan.  The Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, sets limits on the amount that an employer can charge its employees for a health insurance plan.  It also makes sure a group plan has essential benefits.  So while not every group plan will be the perfect plan, you can find a plan with low health insurance rates.

Health Insurance Marketplaces

The Affordable Care Act created health insurance marketplaces where individuals and small businesses can go to easily compare health insurance plans and premiums.  If your employer does not offer you a benefit plan that meets minimum standards, you are eligible for a subsidy to help offset the cost of a medical insurance plan that you buy on the marketplace.  These subsidies are tax credits and can really help to lower the cost of the health insurance rates that you pay for your insurance.

Your Parent’s Plan

PPACA also made it mandatory that children be allowed to stay on their parents plan until they reach age 26.  Many times, someone can add their child to the benefit plan for just a small amount.  If another child is already on the benefit plan, then the health insurance rates will usually not even increase since the parent is either on an Employee + Children or Employee + Family plan to begin with.  So in essence, someone can get free health insurance by enrolling in their parent’s group plan.

Hire an Insurance Broker

If you do not have a group plan to join and you cannot find a satisfactory plan on the exchanges, then it might be a good idea to hire a health insurance broker.  Comparing a multitude of plans from a multitude of insurance companies can be too much to handle, but for an insurance broker, it is just another day.  Brokers have insider knowledge of the insurance industry and can quickly and efficiently find options for comprehensive coverage with good health insurance rates much better than the rest of us.

Health insurance rates are not going to be cheap, but these five methods can help you find low cost health insurance.

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Should Young People Apply for the COBRA Health Insurance Extension?

One of the scariest things about losing a job, transferring to a new job, or going into business for yourself is wondering what will happen to my health insurance.  If you were insured through your previous employer, it can be a little overwhelming thinking about what you will do about your health care needs.  Fortunately, there is COBRA to help you along the way.  COBRA health insurance has some drawbacks, but it can help you stay covered.

What is COBRA Health Insurance?

COBRA health insurance is a law that allows an employee (or a dependent) who loses health insurance due to a qualifying event to stay covered through the group plan of their employer.  The coverage will be identical to what the individual had before the loss of coverage.

What are the Qualifying Events?

COBRA health insurance is available if the loss of coverage is due to any of the following:

  • Voluntary or involuntary termination of employment due to any reason other than gross misconduct
  • Reduction in hours of employment, thereby making the employee ineligible for coverage under their group plan
  • If the employee becomes eligible for Medicare, dependents become eligible for COBRA
  • Divorce or legal separation allows dependents to become eligible for COBRA
  • Death of the covered employee allows dependents to become eligible for COBRA
  • If a child loses dependent child status, the child become eligible for COBRA

How Long Is the Enrollment Period

An individual must be enrolled in COBRA by the later of:

  • 60 days from the loss of coverage, or
  • The date the COBRA election notice is provided by the plan administrator

How Long Does COBRA last?

If the loss of coverage is due to employment termination or a reduction of hours, COBRA health insurance is available for 18 months from the loss of coverage.  If the loss of coverage is due to any of the following, then COBRA is available to dependents for 36 months:

  • Employee becoming eligible for Medicare (COBRA is available for 36 months from Medicare eligibility date)
  • Divorce or legal separation
  • Death of employee
  • Loss of child status

What Does COBRA Cost?

A downside of COBRA is that the subscriber must pay the entire premium of the plan (plus 2% generally for administration fees).  This can come as a shock to some people who are used to just paying a percentage of the premium through their employer’s plan.  For example, if the full premium is $500, but the employer just requires a payment of $100, then the former employee will have his or her monthly insurance cost increased by $410 ($500 + 2% = $510) – $100 = $410.

Is COBRA Only Available for Medical Insurance?

An individual can sign up for COBRA for medical, dental, and vision coverage, as long as they were enrolled in these plans before the loss of coverage.

Are All Employers Required to Offer COBRA Coverage?

No, COBRA is only required for employers with at least 20 employees.

Should a Young Person Apply for COBRA Health Insurance Extension?

This is a tricky question, and it depends on the new health insurance plans available, the cost of the plans, and the health care needs of the individual.  Under the Patient Protection and Affordable Care Act (PPACA), insurance companies can no longer deny coverage for pre-existing conditions.  Therefore, it is not necessary to stay on COBRA because you are afraid of not being able to get coverage elsewhere.

However, if you look around and find that other coverage options are not as price-friendly, or do not cover the same level of benefits, it could be worth it to stay on COBRA.

But if you move to a new employer who offers health insurance, it will almost always be beneficial to switch to their plan since they will most likely subsidize a portion of the health insurance cost.

Remember, though, that there is a limit to how long you can keep the COBRA health insurance extension, so sooner or later you will have to find a new plan in which to enroll.

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