Benefits for young employed adults

"I’m young! I don't need extensive health insurance coverage!"

"I only visit the doctor twice a year; do I need more insurance coverage?"

These are dangerous assumptions even for the healthiest young Americans. October 1 is a big day as it launches the new Health Insurance Exchanges through which Americans can browse and buy insurance options. Check out more details on that in our Affordable Care Act and your FSA post.

We recently joined an online “Health Insurance for Young Adults” chat with WebMD health care reform experts, Lisa Zamosky and Dean Rosen, as well as Christina Postolowski from Young Invincibles, an organization dedicated to young adults.

The issues

“I don’t need health insurance since I’m healthy.”

According to Zamosky, this is a myth because young people are often confronted with health problems.

“About 16% deal with chronic illnesses that require them to seek care on a regular basis. And young adults between the ages of 19 and 29 visit the emergency room more than any other group under the age of 75, mostly due to accidents,” Zamosky said in the chat. “What's more, there's a significant amount of research that shows young people themselves recognize the value of health insurance to protect them both physically and financially. The biggest barrier to health insurance for this group has been cost, not a lack of interest in being covered.”

“I can’t afford to spend a lot on health insurance”

As Dean Rosen pointed out, young adults will be able to enjoy a few insurance options next year.

“While young adults may select from any of the plan types offered on the exchanges (e.g. PPOs, HMOs, EPOs) there are two types of plans that may be particularly attractive to young, healthy individuals: High Deductible Health Plans (HDHPs) and Catastrophic Plans,” Rosen said.

We participated in the discussion (as "FSAinfo") asking: "Do you think young employed adults know enough about the benefits of Flexible Spending Accounts? How can more awareness get raised?"

"Flexible Spending Accounts are a great option for many people, including younger adults. They give people some additional money to use - on a pre-tax basis - for health services they need. And, just like the name says, they are indeed flexible. The best way to get word out is through forums like this, and through employers," said Rosen.

Can I get an HDHP and an HSA? How can a Flexible Spending Account benefit me?

A young employed adult would be able to get a Health Savings Account (HSA) with a qualified HDHP.
If a young employed adult has an HDHP and a health FSA, then he/she cannot make contributions to an HSA - unless it is a Limited Purpose FSA.

Rosen makes a good point, “A HDHP is a health insurance plan that generally does not cover out-of-pocket expenses until an individual reaches his/her annual deductible (aside from expenses for certain preventive care identified by the plan, such as childhood immunizations, well-baby exams and periodic physicals). True to their name, HDHPs have very high deductibles. On the other hand, premiums for these plans are usually substantially lower than premiums for other plan types.” Health Care Reform also limits the amount that individuals will be responsible for out of pocket for all plans, so HDHPs may be a real solution.

Benefits of an FSA

The FSA is pre-tax (no Social Security and Medicare taxes).
You can start using your FSA funds on day one of the plan year.
Your FSA can be used toward a variety of qualified expenses:

Over-the-counter products.
Over-the-counter drugs and medicines.
FSA Eligible Services. You can visit many types of health care specialists ranging from your physician to dentists to dermatologists to chiropractors and more. Cover your co-pays, deductibles and coinsurance with your FSA!