Time is of the essence in order to maintain or find affordable health insurance when leaving school. You must take action fast or risk being “locked-out” of the health insurance market for several months, due to a little publicized defect in the Obamacare legislation. We suggest 2 actions to find affordable health coverage when leaving school, which have been made possible under the Affordable Care Act:
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First, if you have not yet turned Age 26 and have been covered on your parent’s health plan, the Affordable Care Act allows you to continue on through age of 25. Is this your best option? Maybe, but there are two reasons to look at other options available through the Affordable Care Act:
- Your parent’s health plan may have limited medical facilities e.g. Kaiser where you live, or
- The monthly insurance rate may be lower through Covered California with a subsidy, if you qualify
Second, the following are two new options made available through the Affordable Care Act:
- Covered California provides access to most private health plans e.g. Kaiser Permanente, Anthem Blue Cross, Blue Shield of California, HealthNet EPO and PPO plans and some regional providers as well (availability varies according to each of California’s counties- these folks will give you free assistance).
Extra caution is advised, however: You must complete and submit your application prior to the desired 1st of the month coverage start date to avoid a gap in coverage, plus a 60-Day time limit applies. Warning: failure to enroll within the special 60-day period will not only incur a possible IRS tax penalty, but will consequently lock you out of the U.S. health insurance market until the following open enrollment period i.e. January 1st! (This is a lesser known problem with the Affordable Care Act) Read more about your special enrollment qualifying event here;
- Apply Direct- to the insurance carrier (Kaiser Permanente, Anthem Blue Cross, Blue Shield of California, Cigna, HealthNet and others) is easier than going through Covered California and the prices are virtually identical under California law.
The only reason you would choose the Covered California exchange (above) over this 3rd option is if you were to qualify for a subsidy or Advance Premium Tax Credit. Otherwise, CoveredCA is not worth the hassle of providing personal tax forms, proof of California residency, employment information etc.
- Deadlines: The same warning applies as above i.e. you must complete and submit your application prior to the desired 1st of the month coverage start date to avoid a gap in coverage; the 60 Day Limit also applies.
The easiest part of this process is choosing a plan, and the hardest is getting the triggering loss of coverage forms to the carrier (the required document and method vary by health plan). Don’t risk losing your effective date on a technicality: Use a competent broker who is licensed and certified to help you compare all your options, on or off the exchange. Especially valuable is the broker will help you submit a properly completed application forms to the health plan of your choice!
Certified Insurance Agents who offer educational meetings are a free service to consumers under the ACA and California law. Find a local meeting here. If you don’t use a certified agent, then you could run into the problems publicized by KPIX 5 (San Francisco): Watch this news story here.