Under 26? The Benefits of Staying on Your Parent’s

Health Plan

ExpectationsThe under 26 crowd have to decide whether to stay on their parent’s health plan or not. Oh, wait – that’s actually a good thing. The fact of the matter is – as a result of the Affordable Care Act (ACA), also known as Obamacare; young adults have more options in choosing their health insurance than they did prior to the landmark legislation. 

Years Prior to ACABefore the ACA, many young adults were forced to re-evaluate their priorities while searching for a job. For some, a steady salary carried more weight than so-called “fringe benefits”, forsaking their health to simply get through the employment door. Sadly, as is often the case, entry-level jobs don’t offer any healthcare benefits. And, if they do, the employee’s share of costs can be a hardship for a minimum wage job, essentially pricing them out of the market altogether.

PrioritiesForegoing health insurance in favor of paying other necessities, such as food and bills, has been a common behavior for quite some time…and, not only among the 26 year olds and under. Since most twenty-somethings are generally in good health, they rarely feel the need to visit the doctor, making health insurance nothing more than a mere afterthought.

Potential RiskThere are some potentially serious consequences associated with that kind of thinking. If you’re drowning in student loans, an unexpected and devastating illness or accident can rack up thousands to tens of thousands of dollars in hospital and doctor bills. How would you pay for them? It’s not a coincidence that over half of personal bankruptcies result from unpaid medical bills.

Available OptionsNow, along with the option of buying health coverage through their employer (should it be offered), young people under the age of 26 can also choose to enroll in their parent’s health plan. The advantage – they can get on the plan even if they’re married or are no longer a dependent…as well as purchase an individual plan on the health insurance open marketplace if they decide to do so.

Current CoveragesSo, if you currently have no coverage and want to explore your options, you can start researching what’s available now…because ACA’s 2015 open enrollment period is from November 15, 2014 to February 15, 2015. In addition, your employer or parent’s company will also be providing dependent health coverage open enrollment. Check with them for the precise dates.

Non-enrollment PenaltiesAnother negative to not enrolling in a healthcare plan is the individual mandate, which states, per the ACA, that most people must maintain health insurance with minimum required coverage for themselves and their dependents or face a non-compliance penalty. However, if your income falls below the poverty line you will be exempt from that penalty. Should you decide to forego the insurance coverage and pay the penalty, keep in mind, you’ll still be responsible for any and all healthcare expenses you incur. For more information go to healthcare.gov/exemptions.

FYIOn a final note, check with your parent’s plan. If it offers dependent coverage, they can add you until you turn 26, with little or no restrictions. It’s well worth the consideration..

Other Optional Coverages• A catastrophic health plan designed to financially protect those under 30 against worst-case scenarios like a serious accident or illness. For information, search “catastrophic” at healthcare.gov.• If your employer’s insurance is unaffordable and your income falls below certain levels, you may qualify for a tax credit that reduces the overall cost of ACA plan coverage.• Many states expanded eligibility guidelines for their Medicaid programs under the ACA, which means you could earn more and still qualify for Medicaid. To learn more about subsidies and Medicaid eligibility go to healthcare.gov.

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