Turning 26, When Should I Apply for ObamaCare?

There is no letter or form required to qualify for employer coverage and the Affordable Care Act doesn’t require employers to keep track of what insurance employees have. They are simply required to offer coverage to most of their employees, including your son. And it requires your son to have minimal essential coverage, but not what insurer he must have. If your son has any issues getting the employer coverage he should call the states Insurance Commissioner for advice.

First, insurers can charge more based on an age, so younger adults are offered less expensive premiums to begin with. Second, it really depends a little on what state the person is and how much over $16,000 their income is. Third, those under 30 years old can chose to purchase a catastrophic health plan and pair it with an Health Savings Account (HSA) which should be taken into consideration.

Catastrophic Plans- You can’t get cost assistance for catastrophic plans, but the tax benefits, flexibility, and independence offered by catastrophic plans makes them an increasingly good better and less expensive coverage option as one moves up the income scale. Everyone that is under 30 (even if they have a lot of health issues) should compare the total annual costs of catastrophic options (premiums and deductible) to the total costs of conventional health plans on the marketplaces (premiums and deductible, minus cost assistance). Often Catastrophic Health Plans are cheaper in the long run, especially when at higher incomes with no cost assistance. This is because the amount saved through lower premium costs for the year is often greater than the difference in deductibles for the Bronze, Silver, Gold, and Platinum Plans. And I found that this was progressively the case, with Bronze plans being the most similar in cost to catastrophic plans and Platinum plans being significantly more costly (high premiums) even for those who have chronic illnesses. The difference however, is that all the money saved from the Premium can be used on out-of-pocket medical costs immediately. It can be saved in an HSA and lower your MAGI and AGI (tax deduction). Also, you have insurance despite having to pay out-of-pocket for the initial costs, so you’ll get the prices negotiated by the insurer, but they may not cover the preventative care before deductible so be sure to look for one that does.

Medicaid – In 2017 a person making up to $16,394 a year would qualify for Medicaid in States that expanded Medicaid (138%). In other states the least expensive health insurance option on the Marketplace would likely cost little to nothing (advanced Premiums Tax Credits applied to bronze plan for example), but wouldn’t be eligible for Cost Reduction Subsidies (CRS) for out-of-pocket expenses like the high deductibles. This is the best option if you qualify in your state.

Silver Plan – If you are between 100% and 250% FPL ($11,880 to $29,700 in 2017) you would get both types of cost assistance by choosing a Silver Plan. The premium cost your would be responsible for would scale, but is still based on a wide range of factors (like location, average cost of bronze, whether you are a smoker). It is however capped at an ever increasing percentage of your income as you earn more income (up to 400% FPL), you can learn more about it here (see The chart that shows adjustments for each poverty level). CRS on the other hand, is only available between 100-250% FPL. This type of assistance is paid to the insurers directly and in exchange you are responsible for a much lower deductibles and copays, but the transition is much less smooth than the premium tax credits.

TIP: Some state Marketplaces don’t actually show you this when you are searching which can be incredibly frustrating and confusing. This is because technically its the same plan as the one with a $5,000 deductible, but the CRS the insurer gets on your behalf caps the amount of deducible and copay that you are responsible in progressively lower tiers the lower your income (down to 100% FPL). See “Cost Sharing Reduction Examples” on this page.

the main point is, I can’t give any really definitive examples without more details, but these are the most likely best bets. The more income someone earns, the more they are responsible for. If it goes over 8.13% they can apply for an exemption.