Reaching the age of 26 is a new benchmark for Millennials, as they mark a new rite of passage of buying health insurance for the first time.
Gen Y-ers lose health insurance coverage under their parents’ plan once they turn 26 and must seek an individual plan, which is mandated by the Affordable Care Act (aka Obamacare).
Becoming 26 years old is counted as a qualifying life event under the ACA, and Millennials have a 60-day time period to research and purchase a health insurance plan. Millennials are required by law to buy their own coverage or face paying the tax penalty of $695 per adult or 2.5% of your taxable income in 2016, whichever is greater.
“Your parents have the option (not the obligation) to keep you enrolled in the family health insurance plan until you turn 26,” said Nate Purpura, vice president of consumer affairs at eHealth.com, an online health insurance exchange based in Mountain View, Calif. “Once you reach that age, however, you’re on your own when it comes to health coverage.”
You can also enroll during the nationwide open enrollment period, which began on November 1 and will continue through January 31, 2016. Millennials who are shopping now for their first health insurance plan should check to see if they qualify for government subsidies and follow these other guidelines.
All Plans Offer Free Preventative Care
One of the mandates of the ACA is that every single plan must include free annual checkups from your doctor, the flu shot and other important vaccines, said Noah Lang, CEO of Stride Health, the San Francisco health insurance exchange company. The preventative care is the same regardless if you buy a bronze, silver or gold plan.
“If you never see the doctor for anything but preventive care, you’re effectively getting the same coverage whether you have a bronze or a gold plan,” said Purpura. “However, if you get sick or need to pick up prescription drugs, you’ll find that your coverage is not the same. That’s where higher metal level plans show their value.”
One major caveat – if you wind up earning more money than what was estimated, save up some money to pay it back next spring when you are filing for taxes.
“Your subsidies will be based on the money you actually earn during the year you’re receiving subsidies, so be careful not to underestimate your income or you could end up paying some of your subsidies back at tax time.