Top 5 Health Insurance Tips for 2017 College Grads
Updated on December 06, 2019
With the cost of health insurance increasing each year and the future of health reform and Obamacare uncertain, many of today’s college grads are worried about their coverage options. In order to educate them about their options and point them in the right direction, we’ve compiled the following health insurance tips just for this year’s grads:
1) Mom & Dad’s plan – When to say “Thanks but no thanks” – Current law allows your parents to keep you on the family health insurance plan until your 26th birthday, and many grads get covered that way. However, buying coverage on your own may make more sense if you live in a different city without access to the network providers for your parents’ plan or if you can save money by purchasing coverage for yourself that better meets your personal needs.
2) Special enrollment periods – Use ‘em before you lose ’em – If you want to purchase a major medical Obamacare-compliant health insurance plan on your own, you need to do so during the annual open enrollment period (which typically begins November 1) or when you experience a “qualifying life event.” Graduating from college is not a qualifying life event, but events such as moving to a new city or state, losing qualified coverage that you had before, getting married or having a child may allow you to purchase coverage on your own outside of open enrollment.
3) Obamacare subsidies – Understand the risks and rewards – As a single person, if you earn less than about $48,000 per year, you may be eligible for government subsidies when you purchase a major medical health plan. This can make your coverage significantly more affordable, depending on your income. However, keep in mind that your initial subsidy determination is based on your estimated income for the year. If you end up earning more than expected, you may be required to pay back some or all of the subsidy dollars that were applied toward your monthly premiums during the year. Proposals by Congressional Republicans may change the way subsidies work, but income-based Obamacare subsidies are still in place for now.
4) Obamacare taxes – Avoid the sting of an unexpected tax hit – If you go without major medical health insurance for more than two consecutive months during the 2017 calendar year, you may be subject to an Obamacare tax penalty. The penalty for 2017 is $695 per adult or 2.5% of your taxable income, whichever is greater. Congressional Republicans’ health reform proposals would do away with this tax penalty for going uninsured, but for now the Obamacare tax penalty is still the law.
5) Obamacare alternatives – What is packaged medical insurance? – Some people simply cannot afford to purchase major medical coverage or they don’t qualify for coverage because they haven’t had a qualifying life event. Where can you turn if you still want some protection against unexpected medical bills? Other insurance products that may be available year-round include short-term health insurance plans, accident insurance, critical illness insurance, dental or vision insurance, etc. These may be purchased individually or conveniently purchased together as a recommended package of medical insurance products. Coverage under products like these can be significantly more affordable than major medical coverage, but keep in mind that these plans will not protect you from Obamacare tax penalties and do not typically have Obamacare features such as coverage for pre-existing conditions or the full set of minimum essential benefits required by Obamacare.