If you just graduated from college, or will soon, chances are you’re mulling over next steps, figuring out who you are and what the future holds (not to mention how you’ll make money and support yourself).
Another big-picture issue to think about is your health coverage. If you’ve been on a student policy that’s ending soon, you’ll need to find another plan. Here are some tips to help.
Many college graduates either move after finishing school or lose their health insurance. Both are typically qualifying events that make you eligible to buy coverage on one of the Affordable Care Act (ACA) exchanges outside of open enrollment. You’ll have a window of 60 days to sign up, so don’t procrastinate.
Do your parents have a health policy that includes dependent coverage? If they have a marketplace plan, and you’ve experienced a qualifying event, you can be added to their plan. If they’ve got employer-based coverage, the rules vary by plan as to how soon you can sign up, meaning you may have to wait until an open enrollment period.
Both employer-based plans and exchange plans allow you to stay on them until you’re 26. That’s true even if you live on your own, are financially independent, are married, or can get coverage through your own job. If both your parents’ plans offer dependent coverage (and it's during both plans' open enrollment period), neither insurer can turn you down, so you can take your pick.
If you live in a different state than your parents, these same rules still apply. However, getting on their policy might not be the best move for you because most plans have a network of providers within a certain geographical area, and you’ll probably have a hard time staying in-network.
If their plan covers all dependents at a set price, everybody wins, but some plans charge a premium for each additional dependent. (As for who’s on the hook for those extra bucks, that’s something you’ll have to work out with your folks.)
If your parents don’t have insurance, are on Medicare or Medicaid, or can’t add you to their plan, you have more options. So keep reading.
Most employers with 50 or more full-time workers and even some smaller employers provide affordable health coverage. When you're offered a new job, ask if health insurance is part of the deal. If your employer offers individual coverage that’s not affordable (i.e., premiums are more than 9.5 percent of your household income), you should check out the individual marketplace.
The ACA marketplaces make it easy to compare plans, which all have to meet certain minimum standards of coverage. There are four levels of plans, which are named after metals: platinum, gold, silver, bronze. Generally, plans with higher monthly premiums (platinum and gold) give you more coverage and will pay more of your medical expenses. Silver and bronze level plans have smaller premiums, but higher deductibles and copays (your out-of-pocket costs). If you’re relatively healthy and on a tight budget, they may be your best buy.
You won’t have to disclose any pre-existing conditions when shopping, but keep them in mind when choosing your plan. If you have a chronic condition like asthma and you know you’ll need a lot of healthcare, you’ll want to buy a plan that does the best job of covering the services you'll need.
Depending on your income, you may be eligible for a tax subsidy to help pay your premiums. But you won’t qualify if you’re still listed as a dependent on your parents’ tax return and you’re eligible for coverage on their plan. (On the other hand, your parents may qualify for a subsidy if they’re adding you as a dependent to their plan.)
If you’re not making a lot of money, you may qualify for Medicaid. In most states the income limit for 2015 is $16,105 for a single person (it's adjusted annually). Some states have expanded Medicaid eligibility under the ACA, but others have chosen not to, so you should check to see what's happening in your state.
Also, there are no deadlines or enrollment periods to sign up for Medicaid — you can fill out an application anytime.
Young adults who are under 30 or who qualify for a hardship exemption can buy what’s called a catastrophic health plan. These plans have low premiums and are really intended to protect you from sky-high medical bills after a serious accident or illness. They won’t be of much help with routine healthcare costs, however, as catastrophic plans require you to pay most of your medical expenses up to a certain amount, usually a few thousand dollars.
The Affordable Care Act requires most Americans to buy health insurance. If you don’t get covered, not only will you have to pay for your medical expenses, you also may owe a penalty when you fill out your tax return. For 2015, the penalty will be roughly 2 percent of your income or $325, whichever is higher. For 2016, it’ll rise to about 2.5 percent or $695. After that, it’ll be adjusted for inflation.
You’ll catch a break if you were insured for part of the year — meaning you’ll only have to pay a partial penalty. You won’t have to pay a penalty if you made less than $10,150 or if you were uninsured for less than three consecutive months.