The Patient Protection and Affordable Care Act (ACA), or Obamacare, was enacted with the goal of providing affordable health insurance options for millions of uninsured Americans. The ACA was designed to help underserved groups, including low-income individuals and families, women, children, the elderly, the disabled, and those unable to obtain health coverage due to medical history (such as pre-existing conditions).
It was not necessarily designed with young adults in mind, but there are a number of ways in which ACA regulations have helped U.S. citizens in their late teens and twenties to receive the health coverage and access to essential health services they might otherwise have had to forego after becoming legal adults. With many insurance providers ousting adult children from parental insurance policies the moment they turned 18 prior to Obamacare, many young adults with limited funds were left uninsured.
This is no longer the case. Thanks to a variety of provisions and subsidies listed in the Affordable Care Act, young adults now have many options to obtain affordable coverage, at least until they finish school and/or find gainful employment. This is good news since every U.S. citizen is required to maintain minimum essential coverage standards or face annual penalties for a failure to comply with ACA regulations.
If you fall into this category and you’re curious about what options are available to you since the enactment of Obamacare, here are a few things every young adult should know about their rights under Obamacare.
The best option for the majority of young adults is to stay on a parent’s insurance policy since this will confer the best coverage at the lowest cost in most cases. This is especially true for students that are unable to work and receive full-time benefits during their time in college.
The good news is that Obamacare has increased the length of time a child (even an adult child) can remain on a parent’s insurance policy. The ACA has mandated that parents be allowed to continue adding children as covered parties until the age of 26.
Of course, this doesn’t necessarily mean that your parents will continue to pay for your insurance once you enter adulthood – only that they are allowed to. However, if your parents can’t afford to continue paying for your insurance, you may want to discuss payment options with them.
If you can pay for your own coverage under their policy, it may end up costing far less than other options available to you while providing more extensive coverage. For students living on loans and/or part-time employment, this could be a smart strategy.
Benefits through Employment
At this point, most employers are required to provide benefits for full-time employees (except for companies with fewer than fifty full-time employees). This is due to the employer mandate portion of the ACA, which recently went into effect following delays.
Unfortunately, most students are not full-time employees and may therefore be ineligible for employer-sponsored health benefits. That said, many companies have elected to provide health benefits for employees regardless of the size of the company or whether or not employees are full-time or part-time.
Employers are encouraged to consider providing health benefits even if they aren’t required to by law and they may receive tax incentives for doing so. It’s always best to speak with your employer about whether or not you’re eligible to take advantage of benefits (even if you’re only a part-time employee) or seek jobs at companies that offer benefits for their part-time workers.
Healthcare Marketplace Plans
The healthcare marketplace is broken up into state exchanges. Whether yours is managed by your state, by the federal government, or through a partnership, your state exchange (for your state of residence) is the platform you’ll use to sign up for health insurance if you’re unable to maintain coverage under a parental policy or through your place of employment.
Since the ACA mandates that every U.S. citizen, including young adults, must meet minimum coverage standards, you have little choice but to obtain health insurance, and the marketplace provides the most cost-effective options (as opposed to off-exchange carriers). You can, of course, choose to forego coverage, but you will be penalized, and with fines increasing annually you might end up paying as much as (or more than) you would have for coverage.
Because many students fall into low-income categories, they may be eligible for assistance or even exemptions. However, you won’t know until you enroll through the healthcare marketplace. If you do qualify for an exemption, you’ll still have to fill out appropriate paperwork and gain approval if you want to avoid penalization.
Keep in mind that health coverage you receive through your college campus (many have their own benefits in place for students) may not meet the standards for minimum essential coverage and will therefore not comply with ACA requirements.
Because many young adults have yet to find gainful employment, and many won’t work at all during their time in college, most qualify for cost assistance. This means that they can receive coverage at a discount or even for free in some cases through the health insurance marketplace. In many cases, low-income young adults will qualify for coverage through Medicaid.
According to the Obamacare Facts website, 6 out of 10 young adults are eligible for subsidies that will reduce health insurance premiums to less than $100 per month, and in some cases, less than $50 per month. You may also continue to receive coverage under CHIP (Children’s Health Insurance Program) up to the age of 19 in some states.
This coverage is reserved for children whose parents do not qualify for Medicaid but also don’t earn enough to pay for health insurance coverage. Until the age of 19, young adults are also eligible to continue receiving pediatric dental and vision care (provided parents don’t opt out of this coverage).
Once young adults reach the age of 26 and are no longer eligible to receive coverage under a parental policy, they will have no choice but to obtain their own insurance. Luckily, there are subsidies in place in many states to help young adults find affordable health insurance.
Submit your questions below or start a conversation in the comments!