A Parent Guide for Discussing Obamacare With Young Adults Home for the Holidays

Important deadlines and facts to know when talking about health insurance with your children older than age 26.

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As Jack Frost nips at noses this winter, something else is taking a nip: several important dates for Obamacare that fall shortly after the busy holiday season.

A key provision of the Affordable Care Act allows a person to stay on his or her parents’ insurance until age 26 – regardless of if the young adult is married or eligible for an employer insurance plan. At the end of 2011, more than 6.6 million  young adults had health insurance coverage, who otherwise might not have, due to this provision of the legislation. But what happens when a person is too old to ride mom and dad’s insurance coattails?

If you plan to discuss health insurance with your young adult children this holiday season, use this guide to make sure you cover all the basics.

Make sure your young adults come prepared

Everyone applying for subsidies through Obamacare will need to know their Social Security number and information about their employer, which can be found on a pay stub or W-2 tax form. Doing some research before shopping for insurance can also be helpful. Obamacare has introduced new terms, such as essential health benefits, metal tiers and individual mandate, and understanding these nuances of the law will help you make informed decisions about choosing a health plan.

Provide a timeline

Young adults tend to have a lot on their plates, and staying current on the daily changes surrounding health reform might not be their top priority. The good news is that you can highlight just three dates that cover the most important bases.

  • Dec. 23, 2013 is the last day to sign up if you want a health plan.
  • Jan. 1, 2014 is when health coverage begins for those who have enrolled.
  • March 31, 2014 is a big day for two reasons: It is the last day of open enrollment. So after this time, you will have to wait until 2015 to sign up for an Obamacare plan. It’s also the day by which you must enroll to avoid a tax penalty for not having insurance.
  • While these are the essential dates to know now, stay posted – there’s a good chance they could change.

    Know the importance of getting insured

    Young, healthy adults, often deemed “young invincibles,” are key to Obamcare’s success. While this population might be viewed as primarily healthy, young adults can also benefit from affordable coverage under the law. Young adults are more likely to experience an emergency than a chronic condition, and unexpected events can bring steep health care costs, such as $7,500 for a broken leg or $30,000 for a three-day hospital stay, as healthcare.gov points out. Sports players might consider the cost of torn knee ligaments (about $5,000  for ACL reconstruction), and young women should be aware of the cost of pregnancy and newborn care (which can add up to thousands of dollars depending on the type of birth).

    These numbers might scare you and your young adult children, but take comfort in the fact that the Department of Health and Human Services says nearly 50 percent of Americans ages 18 to 34 will be able to purchase a health insurance plan through Obamacare for less than $50 per month, which adds up to just $600 per year. The government also offers subsidies to people who earn less than four times poverty level – about $46,000 in 2013 – which helps to make premiums affordable for many Americans.

    What if your young adult doesn’t want to sign up?

    Some young people will still not want or be able to afford health insurance, despite your best intentions. Be prepared to discuss the repercussions of such a decision, including the tax penalty that will be levied against uninsured individuals. It isn’t so bad for 2014 – at just $95 for an individual – but the fee, which is to be paid when income taxes are filed, will increase to $695 in 2016. Considering so many young adults will have access to plans that cost about $600 per year, getting insurance may be more affordable than paying for any unexpected health issues.

    Napala Pratini writes for NerdWallet Health. Learn more about affordable coverage on the Obamacare insurance page.