Health eDeals

407.598.0298

7 Health Insurance Options for Young Adults

7 Health Insurance Options for Young Adults

When it comes to health insurance in the age of Obamacare, young adults have several possibilities. Below, we’ve provided an overview of seven common options for those of the millennial generation.

1. Employer-sponsored health insurance coverage

Young adults who are employed full time, may have access to health insurance through their workplace. This is often a desirable route since employers typically pay a portion of premium costs. However, depending on one’s age and how much he or she pays for job-based health insurance coverage, they may have other options.

Those who are younger than age 26 may opt to stay on a parent’s health insurance plan. Those who are 26 and older who have access to employer-sponsored health insurance that is deemed affordable and meets minimum value will not qualify for savings offered through exchange-based plans. According to HealthCare.gov, “A job-based health plan is considered ‘affordable’ if the employee’s share of premiums for the lowest cost self-only coverage that meets the minimum value standard is less than 9.5% of their family’s income.” If, by theses measures, workplace health insurance coverage is not affordable, young adults and others may be able to shop the Health Insurance Marketplace and qualify for subsidies based on income.

Does it fulfill the individual mandate? Yes. Employer-sponsored major medical insurance plans must meet Affordable Care Act requirements and therefore fulfill the requirement that most Americans have health insurance.

Is it eligible for subsidies? No. Employer-sponsored health insurance does not qualify for Obamacare premium tax credits or other cost-sharing subsidies.

2. A parent’s health insurance plan

Shortly after the Affordable Care Act became law, adult children were allowed to remain on a parent’s health insurance coverage for policies effective on or after Sept. 23, 2010. Now that Obamacare’s Health Insurance Marketplace is open and Americans may buy health insurance from state-based and federally facilitated health insurance exchanges, young adults may still remain on their parents’ health insurance until age 26. This applies regardless of their financial, marital or dependent status. Adult children covered by a parent’s health insurance plan do not need to live in the same home.

As stated above, even those with access to health insurance coverage through an employer may remain on a parent’s health insurance through their 26th birthday. It also applies regardless of whether a parent’s health insurance plan is obtained through an employer, in the private marketplace or through the Health Insurance Marketplace.

When deciding whether or not to obtain health insurance coverage through a parent, young adults should consider whether or not the plan’s provider network covers health care providers, clinics and hospitals where they live.

Does it fulfill the individual mandate? Yes, as long as the parent’s plan qualifies as minimum essential coverage. Visit IRS.gov a list of what is and is not considered minimum essential coverage.

Is it eligible for subsidies? That depends on income. Whose income depends on whether or not or the adult child is claimed as a dependent on a parent’s tax return.

3. The Health Insurance Marketplace

Young adults who do not have access to employer or parental health insurance coverage may opt to shop the state-based and federally facilitated exchanges known as the Health Insurance Marketplace. Those who are not claimed as independents on their parents’ tax returns and have an income between 100 and 400 percent of the federal poverty level may be eligible premium tax credits. Furthermore, those who purchase a silver plan and earn up to 250 percent of FPL may qualify for additional cost-sharing subsidies.

Those younger than 30 can buy a catastrophic plan through the Health Insurance Marketplace. Catastrophic health insurance coverage means an individual pays a lower monthly premium and a higher deductible than he or she would with an individual major medical insurance plan. Benefits typically do not kick in until the deductible has been met; however, under the Affordable Care Act catastrophic plans include three primary care visits and certain preventive care benefits before the deductible has been met.

Does it fulfill the individual mandate? Yes.

Is it eligible for subsidies? That depends on income and the type of health insurance plan selected. Catastrophic plans do not qualify for tax credits and other cost-sharing subsidies.

4. Non-exchange health insurance plans

Those whose financial position disqualifies them from receiving premium tax credits or other cost-sharing subsidies or those who do not wish to buy from Obamacare exchanges may consider buying individual major medical insurance from the private marketplace.

These health insurance plans must also fulfill the Affordable Care Act’s requirements for minimum essential coverage. That means they are categorized by actuarial metal levels, include the 10 categories of essential health benefits as well as certain preventive care benefits, and are subject to the same provisions as plans sold in the Health Insurance Marketplace. As with health insurance covereage sold through Obamacare exchanges, applicants cannot be denied or charged more based on health history.

Plans sold away from the Health Insurance Marketplace may be purchased directly from health insurance carriers, through a health insurance agent or broker, or through a website such as ehealthinsurance.com or healthedeals.com.

Does it fulfill the individual mandate? Yes, as long as it is major medical insurance.

Is it eligible for subsidies? No. Plans purchased outside the Health Insurance Marketplace do not qualify for premium tax credits and other cost-sharing subsidies.

5. Student health insurance plans

Some colleges and universities offer health insurance coverage to students. These plans can be attractive to young adults because they offer local provider networks—if a student is on a parent’s health insurance plan, he or she may need to travel home to get in-network health care—and often lower premium rates. Students who are unsure if their academic institution’s health insurance plan meets Obamacare requirements should check with the plan.

Student health insurance plans do not qualify for premium tax credits and cost-sharing subsidies. And just because students have access to health insurance coverage through their college or university does not mean they have to enroll in it.

Does it fulfill the individual mandate? Check with the insurance plan.

Is it eligible for subsidies? No. Plans purchased outside the Health Insurance Marketplace do not qualify for premium tax credits and other cost-sharing subsidies.

6. Medicaid

As part of the Affordable Care Act, many states opted to expand their Medicaid programs. Medicaid provides low-cost or free health insurance for low-income individuals. In states where Medicaid has been expanded, adults younger than 65 who make up to 133 percent of the federal poverty level may be eligible, according to HealthCare.gov. For a single-person household, that is $15,800 per year.

Medicaid eligibility can be determined when applying for health insurance coverage through the Health Insurance Marketplace. Click here to find out more at HealthCare.gov; scroll down to “Get State Information.”

Does it fulfill the individual mandate? Yes.

Is it eligible for subsidies? No.

7. Temporary health insurance

Temporary health insurance, which is also known as short-term medical insurance is designed to be economical and help with medical bills incurred from unexpected accidents and illnesses. Covered expenses may include inpatient hospital care, outpatient hospital care, and outpatient emergency room visits, among others. Policies may be obtained for 30 to 364 days, depending on individual needs and state of residence.

Short-term medical insurance plans do not include essential health benefits, nor do they fulfill the requirement that most Americans have health insurance. Those who have it may owe a shared responsibility payment—the tax penalty owed by individuals and families who are not granted a hardship exemption and go without major medical health insurance. Applicants may be denied or charged more based on health history.

These plans may be a temporary option for young adults who:

  • Missed open enrollment and want health insurance benefits in the meantime
  • Are between jobs with employer-sponsored health insurance
  • Just turned 26 and no longer qualify for a parent’s health insurance plan
  • Have been recently divorced and no longer have access to a partner’s health insurance plan


Does it fulfill the individual mandate? No.

Is it eligible for subsidies? No.

What’s the best health insurance plan for young adults?
There is no one-size-fits-all solution. When selecting health insurance, young adults and other consumers should consider factors such as what benefits accommodate their health care needs, how much they can afford to pay for monthly premiums as well as out-of-pocket for services received, what providers are included in a plan’s network, and what—if any—financial subsidies they qualify for. The healthedeals.com Health Care Reform Calculator can help you estimate your tax credit.

Working with a health insurance agent or broker may be helpful, whether you plan to buy on or away from the Health Insurance Marketplace. Local help may be found through your state exchange website.

You can also call 888-839-7679 to speak with one of healthedeals.com’s certified health insurance advisors. They can help determine whether or not you qualify for financial assistance and explain the benefits, features and costs of exchange-based plans. They can also help you through exchange-based enrollment or locate non-exchange plans that fit your health care needs and household budget.