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When young adults head off to college, whether it’s freshman year or senior year, there are many things on their minds. And from roommates and majors to tuition and textbooks, health insurance may not be a top consideration.
However, it’s important—not only for financial protection from unexpected medical bills, but also because it’s the law. The Affordable Care Act requires most Americans to have minimum essential coverage.
Fortunately, there are a number of ways college students can fulfill this Obamacare requirement. It might be fair to say that, of any demographic, young adults enjoy the widest range of health insurance coverage options.
Whether you are a parent trying to help your child secure health benefits or a young adult making these decisions on your own for the first time, here are six common options to consider:
Some colleges and universities offer fully insured student health insurance plans to their students (i.e., health insurance plans purchased from a health insurance company).
These fully insured student health plans should include mandatory Affordable Care Act benefits (e.g., essential health benefits, prescription drug benefits, and certain preventive care services at no additional cost, among others).1
Minimum essential coverage? Yes, if it is a fully insured health insurance plan, your student health plan should count as minimum essential coverage.
Self-funded student health insurance plans that started on or before Dec. 31, 2014, may be considered minimum essential coverage; check with your school to confirm2—such plans may or may not have ACA benefits and protections.
Who might consider this option? Young adults who do not have access to a parent’s health insurance plan or qualify for financial assistance when buying coverage through a state-based or federally facilitated exchange might consider buying a student health insurance plan.
Whether or not you must be a full-time student to qualify for student health insurance coverage depends on criteria set by your school.
Where can you enroll? Inquire with your college or university to see if it offers ACA-compliant student health insurance coverage and when they hold enrollment.
The Affordable Care Act requires health insurance companies to allow children to remain on a parent’s major medical health insurance policy through their 26th birthday. This applies to both individual and job-based health insurance plans.
Young adults are eligible for dependent coverage whether or not they are married, have access to job-based benefits or a spouse’s benefits, live with their parents, or are claimed as a dependent on a parent’s tax return.3
Minimum essential coverage? Yes.
Who might consider this option? Young adults that have access to health insurance through their parents may find this option to be easy and cost-effective.
Where can you enroll? This coverage may be available through a parent’s employer, through a state-based or federally facilitated health insurance exchange, or in the private marketplace. You can only enroll during an open-enrollment period unless you qualify for a special enrollment period due to certain life events.
Young adults who are under 30 can buy high-deductible health insurance plans known as catastrophic health plans. Because they tend to have lower monthly premiums, these plans can be attractive to 20-somethings.
Those insured by a catastrophic health plan typically pay for all medical costs up to their deductible amount; however, these plans do cover three primary care visits per year and certain preventive services before the deductible has been met.4
Minimum essential coverage? Yes.
Who might consider this option? Individuals younger than 30 who are in relatively good health and have few medical expenses might consider a catastrophic health plan.
However, it is important to keep in mind that if you do wind up with medical bills due to illnesses, injuries or other healthcare needs, you will likely be on the hook for thousands of dollars before your plan benefits kick in.
Where can you enroll? This coverage may be available through a state-based or federally facilitated health insurance exchange, or in the private marketplace. You can only enroll during an open-enrollment period unless you qualify for a special enrollment period due to certain life events.
This program funded by state and federal governments provides free and low-cost health insurance coverage to those who qualify based on income and other criteria.
Minimum essential coverage? Yes.
Who might consider this option? Young adults that earn up to 138 percent of the federal poverty level and live in a state that expanded Medicaid might consider this program. If you do not live in a state that expanded Medicaid, you can see if you qualify based on other criteria.
Where can you enroll? You can enroll in Medicaid anytime of year through your state’s state-based or federally facilitated health insurance exchange. You can learn more about Medicaid in your state at http://www.medicaid.gov/medicaid-chip-program-information/by-state/by-state.html.
Individuals who do not have access to job-based health insurance can buy their own major medical health insurance benefits.
As with fully insured student and job-based health plans, these Obamacare plans, as they are often called, include benefits and protections required under the healthcare reform law. For example, plans include essential health benefits and certain free preventive care services, and you cannot be denied coverage based on health history.
Minimum essential coverage? Yes.
Who might consider this option? Young adults who do not have access to a parent’s health plan and do not qualify for Medicaid might find an Obamacare plan strikes the right balance when it comes to premium and benefits—especially those who take prescription drugs or require ongoing medical care and therefore would not likely find a catastrophic plan feasible.
Furthermore, young adults who are not claimed as a dependent and are within certain income limits may qualify for premium tax credits and cost-sharing reductions that help lower monthly premiums and out-of-pocket expenses when they purchase coverage from a state-based or federally facilitated exchange. You can apply for financial assistance through your state’s state-based or federally facilitated exchange to see if you qualify.
Where can you enroll? You can buy individual major medical insurance through the state-based and federally facilitated exchanges established under the Affordable Care Act as well as in the private marketplace through an agent or broker, directly from a health insurance carrier, or from a website that offers multiple plan options.
When temporarily uninsured, young adults may consider a short term medical insurance plan. Commonly called short term health insurance, these plans provide coverage for as few as 30 days and up to 364 days, depending on where you live.
Short term health plans typically have lower premium rates than major medical insurance coverage and include benefits that help pay for unexpected medical expenses—although select plans now offer some preventive care benefits. Short term coverage can be tailored to your healthcare and financial needs.
Minimum essential coverage? No.
Who might consider this option? Should an accident or serious illness occur, short term health plans can offer some financial protection to students who are out of a parent’s health insurance plan network, those who turn age 26 and need temporary coverage until they secure an Obamacare or job-based plan, grads looking for a job with benefits or in an employer waiting period, and others in situations that have left them temporarily without ACA-compliant health insurance.
Where can you enroll? You can get a short term insurance quote, compare plan options, and apply for coverage within minutes online. You can begin coverage as soon as the next day.
You may find you qualify for multiple options. Make it a point to consider your healthcare needs and budget before you shop, and then compare the plans available to you. Look at rates and benefits to determine which is the best fit.
Need assistance? Consult a health insurance broker or agent. You can also get quotes for off-exchange Obamacare plans, short term health insurance and supplemental health plans at healthedeals.com and contact a licensed health insurance producer by calling the number at the top of your screen.
Originally posted September 22, 2015.
1 The Henry J. Kaiser Family Foundation. “Health Reform FAQs: Young Adults and Students.” http://kff.org/health-reform/faq/health-reform-frequently-asked-questions/#section-young-adults-and-students
2 HealthCare.gov. “Plan Types That Count as Coverage.” https://www.healthcare.gov/fees-exemptions/plans-that-count-as-coverage/
3 HealthCare.gov. “Health Coverage for Children Under 26.”
4 HealthCare.gov. “Catastrophic Health Insurance Plans.” https://www.healthcare.gov/choose-a-plan/catastrophic-plans/
SHORT-TERM MEDICAL EXPENSE (STM)
THIS IS A SHORT TERM HEALTH BENEFIT PLAN THAT IS NOT INTENDED TO QUALIFY AS THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA). UNLESS YOU PURCHASE A PLAN THAT PROVIDES MINIMUM ESSENTIAL COVERAGE IN ACCORDANCE WITH THE ACA, YOU MAY BE SUBJECT TO A FEDERAL TAX PENALTY. ALSO, THE TERMINATION OR LOSS OF THIS POLICY DOES NOT ENTITLE YOU TO A SPECIAL ENROLLMENT PERIOD TO PURCHASE A HEALTH BENEFIT PLAN THAT QUALIFIES AS MINIMUM ESSENTIAL COVERAGE OUTSIDE OF AN OPEN ENROLLMENT PERIOD. THIS POLICY INCLUDES A PRE-EXISTING CONDITION EXCLUSION PROVISION.
About The IHC Group
Independence Holding Company (NYSE: IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980. The IHC Group owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company) and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss). All products are placed with highly rated carriers.
About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, Inc., doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products via general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit http://www.HealtheDeals.com