There are numerous precious milestones in life we all excitedly anticipate – turning 16 and driving a car, turning 18 and registering to vote, and turning 21 and buying that first alcoholic beverage. But did you know that turning 21 will also cost you under the Affordable Care Act (ACA)?
Under the ACA, policyholders can no longer be denied coverage or be charged higher premiums due to pre-existing conditions. Rates are determined are four factors: age, whether or not you use tobacco, where you live and how many people in the family are going to be covered. This is where turning 21 can get costly.
When is a Child No Longer a Child?
When calculating premiums under the ACA, premiums go up as you age. However, children of any age under 21 are all calculated at the same rate. Once a young adult turns 21, they are calculated at the adult rate. This typically increases premiums by approximately 58 percent.
If you purchased a health plan on your own last year and turn 21 this year or you are covered by a family plan, it’s important that you review your options for 2015, especially if you auto-renewed your health plan.
By auto-renewing your health plan, your premium subsidy remains the same; however, your premiums will be significantly higher with a 21-year-old in the home. This premium difference will be shifted directly to you. There are other risks involved with auto-renewing your health plan, which you can find in my previous blog, Why Allowing Your Health Plan to “Auto-Renew” in 2015 Could Cost You Money.
By re-evaluating your options for 2015 and redetermining your premium subsidy, it’s possible to increase your subsidy and thereby significantly lower your monthly premium. Otherwise, you’ll find yourself on the hook for the full 58 percent rate increase.
Sign Up By February 15
Insurance enrollment for 2015 ends February 15, 2015. Our Advisors are available to review your individual circumstances and help you select the plan that will work best for you and save you the most money. For more information on enrollment dates and deadlines, check out our HSA for America Guide to Open Enrollment web page.
Do you have any questions about age rate increases under the Affordable Care Act? Do you still need to sign up for a plan for 2015? Enrollment ends February 15, 2015.