Millennials are receiving more focus than ever before in the insurance market as the baby boomer generation begins to retire and exit the workforce over the next decade.
While the next generation of employee benefits consumers are coming into the workforce highly educated and eager to make an impact, many don’t seem to “get it” when it comes to health insurance. A recent survey showed that more than 50 percent of millennial employees don’t understand their benefit options, and would rather clean out their email than research health coverage.
In addition to a general reluctance to understand their options, the Affordable Care Act has made several changes that Millennials need to be aware of. Some provisions of the ACA are focused specifically on expanding health coverage options for young adults. Prior to the ACA, many young adults faced great difficulty finding full-time jobs in the post-recession job market, let alone ones with comprehensive benefits. In addition, many young adults found themselves “kicked off” of their parent’s health plan following graduation from either high school or college. This combination resulted in approximately 1 out of 3 recent graduates being uninsured for part of the year following graduation.
As an HR professional, how do you alter this mindset and help your millennial employees navigate their health coverage options?
Many healthy, young adults may think that skipping health insurance sounds like a good idea. Health insurance can be expensive and they might feel it’s not worth the cost if they don’t need much medical care.
However, they will never know when a catastrophic accident or illness will strike. Without insurance to help cover costs, young people can quickly end up in financial trouble. Also, the ACA requires most individuals to obtain health coverage or pay a penalty with their federal tax return.
As an adult, Millennials must explore the health coverage options that are available to them and select the plan that best fits their needs. Lucky for them they have you to help them understand the choices they can make. Here are three basic options you can explain to your millennials about how to obtain coverage, and language you can use to do it:
- Health Coverage Through Your EmployerMany employers offer health coverage to employees as a benefit of employment. In addition, the ACA now requires certain large employers to provide affordable, minimum value health coverage to their full-time employees.
There are several advantages of employer-based plans. Because they are group health plans, risk is spread among the entire group and premiums are usually lower. Your employer may also cover part of the premium cost. In addition, you may be able to choose from a number of plans, depending on the choices offered by your employer.
- Health Coverage Through Your Parent’s PlanQuite often, young adults are able to be covered under a parent’s health plan until the age of 26. If your parent’s plan offers dependent coverage, you are eligible until you turn 26, whether or not you are married, living with your parents, eligible for coverage through your own employer, financially dependent on your parent or are a student. However, it is up to your parent whether you can be covered under his or her plan.
One advantage of being enrolled in your parent’s plan is that you don’t have to shop for coverage. Seeking your own health coverage can be an intimidating and confusing process. You may already be familiar with the benefits and medical providers you have access to under your parent’s plan. Another advantage is that the premium cost may be lower than the cost of coverage you would get on your own.
- Health Coverage Through Marketplace PlansThe ACA required health insurance exchanges, or Marketplaces, to be established in each state. The Marketplace allows individuals to compare health insurance options and purchase coverage. Some people are also able to receive subsidies to help pay for premiums and out-of-pocket expenses. However, you will not be eligible for subsidies if you were offered health insurance (for example, by your employer or a spouse or parent’s plan) that was affordable and covered at least an average of 60 percent of health care costs. Even without subsidies, you may be able to find a health insurance option that fits your budget.
In addition to comprehensive health insurance coverage, you may be eligible for a “catastrophic plan.” These plans are available only to those under 30 years of age and generally have very low premiums and very high deductibles. Although this type of plan covers only the most essential health needs in order to fulfill the ACA requirements, the main purpose of this plan is to protect you from the substantial medical costs that can be incurred from a serious accident or illness.
In order to ensure you have the appropriate coverage for your specific needs, be sure to thoroughly research the options that are available to you. Depending on your situation, it may be helpful to talk with your parents and your HR representative. Buying health insurance may seem unnecessary now as a young and healthy adult, but accidents and illness can strike at any time. Be proactive and be prepared, and don’t forget, your HR and benefits team is here to help you simplify your choices!