The introduction of the Affordable Care Act (ACA) increased protections for young adults and allows them to stay on a parent’s or guardian’s insurance plan until they turn 26.
Young adults turning 26 are the perfect audience for agents selling marketplace plans looking to reach potential clients. Connect with young adults in your community with the marketing tips we’ve included here to meet your sales goals.
Who Is at Risk of Losing Health Care Coverage?
Once a young adult turns 26, they are no longer eligible to stay enrolled in a parent’s insurance plan. A few states have exceptions to this rule. Individuals on a parent’s private insurance plan will typically lose coverage the last day of the month of their 26th birthday. For 26-year-olds on a parent’s marketplace plan, they will lose coverage on December 31 the year of their 26th birthday.
We’re hosting a special webinar on Wednesday, June 12, at 2 PM ET to discuss your opportunities to enroll young adults in marketplace plans! Register now!
According to the Centers for Medicare & Medicaid Services, 30 percent of young adults are uninsured. This demographic makes up more than one in five of uninsured individuals in all age groups. All children on a parent’s insurance plan after September 2010 can stay on that plan until they turn 26. These protections were added to the ACA to reduce administrative costs and coverage gaps for beneficiaries.
What Options Do Young Adults Have for Insurance?
To help young adults close the coverage gaps that are common for their group, there are several options for coverage.
Coverage options for newly disenrolled clients:
- Their own employer-based plan
- A spouse’s or domestic partner’s plan
- A short-term health insurance plan
- Medicaid (if they qualify)
- COBRA
- A marketplace plan!
All of these are great options for young adults to stay covered after losing their original coverage. We recommend agents discuss all the options with their client and find the right plan that works for their specific needs. A marketplace plan can be an affordable option for their first independent health plan.
Why a Marketplace Plan Could Be the Right Choice
A marketplace insurance plan could be the right choice for a young adult for several reasons: they can be affordable, many young adults qualify, and there are savings available to reduce costs.
Marketplace Plans Are Affordable
Individuals whose annual salary is at or below 150 percent of the federal poverty level are eligible to enroll in marketplace coverage if they’re not eligible for Medicaid or an employer’s coverage is too expensive. An employer’s insurance is considered affordable if the required contribution is no more than 8.39 percent of their income. In 2024, young adults who earn at least $22,590 qualify for a marketplace plan with premium tax credits. Enrollees up to 450 percent of the poverty line are also eligible for savings.
Premium tax credits reduce the amount an individual pays for coverage. Tax credits can be used for any metal tier plan, and the individual pays the difference in premiums. Unlike cost-sharing reductions, or subsidies, premium tax credits are awarded based on income and household size in relation to the federal poverty level. Another form of savings comes from cost-sharing reductions or subsidies.
Cost-sharing reductions are determined by calculating income and are awarded on a sliding scale. Individuals between 100 percent and 150 percent of the federal poverty level are eligible for the most cost-sharing reductions. Clients must be mindful of the fact that if they receive cost-sharing reductions, they are only able to be used on silver tier plans. With savings, most individuals have been able to find coverage that costs less than $10 a month.
How Many People Qualify for ACA?
Many people qualify for an ACA plan. In 2024, 45 million people are enrolled in marketplace coverage. A large portion of the people who qualify are young adults. The marketplace enrollment in 2024 is at a record high, and is expected to rise, considering the protections built into the ACA.
When Can Young Adults Enroll in Marketplace Insurance?
If someone has lost coverage in the last 60 days or is expecting to lose coverage in the next 60 days, they can enroll in marketplace coverage during a Special Enrollment Period (SEP). Individuals can also enroll in a plan during the Open Enrollment Period (OEP), which begins November 1. For clients who enroll November 1 through December 15, coverage will begin January 1. For clients who enroll December 16 through January 15, coverage will begin February 1. To reach clients before the OEP, we recommend that you connect with this audience before November 1. This gives clients time to make a decision and you the opportunity to form relationships with them.
How to Market ACA Plans to 26-Year-Olds
Connect with young adults by thinking about the population in your area. Most of the younger demographic is on social media, so we suggest you develop a strong social media presence and strategy to market your services. Gen Z, among whom the oldest is 27, spends the most time on social media daily of any generation. Thirty-five percent of Gen Z individuals studied by McKinsey Health Institute report spending more than two hours a day on social media. Forming a marketing strategy that features social media is the best way to share important information, educate, and invite your audience to upcoming events.
In-person events can also be well-suited for this audience if they are tailored to them. We suggest establishing an event with a clear mission and purpose. Let your attendees know that they have affordable health care options available, and you can help them sign up.
Great venues to host casual events:
- College campuses
- Community centers
- Grocery stores
- Coffee shops
Getting people engaged and excited is key to marketing your services. We suggest being active in your community and participating in community events. Look for local small businesses and non-profits in your area. Do they host events or fundraisers that would be well-attended? Consider forming an affinity partnership with them and inquire about hosting a booth at the event to meet new potential clients.
Build a Referral Program
Your current clients can be a great source of new clients for your business and helpful when fostering great relationships with the ones you have. Recommend that your current clients who have children or grandchildren or know of young adults who are losing health care coverage speak to you about their options for health care coverage. You can take on these prospective clients and help them find a marketplace plan that offers security. Your current clients can recommend your services and can vouch for you.
Curious about learning more about the ACA market and expanding your business? Read our eBook, The Complete Guide to Selling Affordable Care Act Insurance Plans!
Young adults aging out of a parent’s or guardian’s insurance plan could be your next audience for even more ACA sales than last year’s OEP! Build your business and help more clients in your community!
Ritter is here with specific ACA training resources, educational resources, and expert staff! Register with Ritter today to reach your next sales goals.
Share Post