The transition from college to the working world is one filled with much uncertainty. Projects and finals give way to apartment hunting and job interviews. There are deposits to be paid, and don’t forget about those student loans.
And, as if you didn’t already have enough to worry about, there’s one more thing you’ll have to consider once your status as a student has changed: health insurance.
Are you still covered once you graduate? If you’re moving to another town, will your new providers be in-network? And how long do you have to find a new policy if yours is ending? Must you wait for open enrollment?
Do You Need Coverage At All?
If you’re young and healthy, you may be tempted to forego coverage altogether, especially since you’re just getting started in life and funds are probably low. But there are several reasons that might not be a good idea.
One is that, under the Affordable Care Act, all adults are required to have qualified health insurance or else pay a penalty. This year it’s $695 or 2.5 percent of your income, whichever is higher. You’ll have have to pay that amount (or a prorated one if you’re only without coverage for a short time) if you go without coverage for more than two consecutive months.
Another reason is that, even if you think you can’t afford to pay the premiums, the cost of a serious accident or illness could be astronomical by comparison. It’s estimated that the amount Americans spend on debt collections for medical bills is three times what they pay for bank and credit card debt combined.
Here are Your Options
The good news is that if you’re in need of coverage, you have a few options available to you. And if you’re losing any other coverage you had in place, the end of that coverage should count as a “qualifying life event,” which gives you 60 days to find another policy.
Stay on your parents’ plan.
The ACA says young adults can stay on their parents’ health insurance plan up until age 26. Talk to them to see if it makes financial sense to keep you covered under their policy. If you’re moving away, make sure you can find an in-network provider where you’re going.
Another benefit to this option is that, if your parents have a high-deductible plan, both they and you can contribute to separate HSA accounts with limits up to $6,500 and a shared deductible.
Sign up through your new employer.
If you’ve already landed a job, congratulations! You’ll likely have the option of enrolling in your company’s employer-sponsored health insurance for a considerable savings. Consider a high-deductible plan if you don’t have chronic health problems. Just know you’ll have to pay the deductible (usually around $1,200) if something does come up.
A good way to save the necessary funds is in a health savings account. The money in these accounts rolls over year to year and accumulates tax-free. Some employers match contributions to help build these emergency funds.
Purchase your own plan.
If you don’t have a job or your employer doesn’t offer coverage, or if there’s a waiting period to enroll in an employee-sponsored plan, you can also buy a plan on your own. You can do this through a broker or buy a policy on the state exchange. While coverage can be expensive, you may qualify for a subsidy if your income is below a certain threshold. Note that if your parents still claim you as a dependent, your subsidy will be based on your family’s income, not yours.
There are policies available at many price points. You can save on your premiums by purchasing a plan with a higher deductible. If you’re under 30, you can also consider a “catastrophic” plan that requires you to pay for most of your routine care but kicks in if something more serious happens.
Give us a call today so we can help you find the right policy for you. Don’t find yourself caught without coverage!