Health Insurance Options for Volunteers

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Although volunteer work is all about serving others, you still need to take care of yourself by having health insurance. Image © Hero Images/Getty Images

Planning on volunteering? Although you’ll be contributing to society through your volunteer work, society isn’t always as generous in caring for its volunteers as it is in caring for its paid workforce. While 55% of working-age adults in the United States had employer-sponsored health insurance in 2013, don’t count on your volunteer organization providing health insurance. Although some large, well-funded volunteer organizations do, many don’t.

If you’re going to volunteer, you not only need health insurance, you need a bit of savvy to navigate the complicated world of health insurance regulations.  If you’re a legal resident of the U.S., whether or not you’re a citizen, the Affordable Care Act requires that you have health insurance that meets the description of minimum essential coverage. If you don’t, you might have to pay a tax penalty, the individual shared responsibility payment.

Learn how much your penalty would be. See if you might be exempt from the penalty.

Here are your options for health insurance coverage as a volunteer.

Volunteer for an Organization That Provides Health Insurance

Some large, well-known, well-funded volunteer organizations provide some full-time volunteers with health insurance. The Peace Corps, AmeriCorps, Lutheran Volunteer Corps, and organizations that are members of the Catholic Volunteer Network are among them.

If you choose to volunteer for an organization that provides health insurance benefits, ask if the health insurance meets the Affordable Care Act’s requirements for minimum essential coverage. If it doesn’t and you’re a legal resident of the U.S., you’ll need to get coverage that meets minimum essential benefits standards, address the issue of the tax penalty by paying it, or get an exemption from the penalty.

Medicaid

Medicaid is a government social welfare program that provides health insurance to some low income U.S. residents. Since Medicaid is administered by the states, Medicaid differs from state to state. In many states, you’re likely to qualify for Medicaid if your income is 138% of federal poverty level or lower.

However, Medicaid doesn’t always provide benefits for those traveling outside of its geographic coverage territory. If your state’s Medicaid works like this and you’re planning on volunteering out of the country, Medicaid won’t help you much unless you come back to the state that provides your Medicaid coverage when you need health care.

Short-Term Health Insurance

A short-term health plan can be purchased directly from a health insurance company or through a broker. Short-term health plans offer coverage for a specific time period up to six months and aren’t renewable. In some states, you may purchase another short-term plan when your first plan expires, thereby effectively giving you a year of coverage.

In other states, you can’t purchase back-to-back short-term coverage; you’d be limited to six months of coverage.

Premiums tend to be lower for short-term policies than for major medical comprehensive coverage, but there are reasons these plans cost less than comprehensive coverage. Short-term plans don’t have to comply with all of the consumer protection mandates in the Affordable Care Act. This means short-term health insurance is still subject to underwriting; you may find it excludes your pre-existing medical conditions or charges higher premiums because of them. It may charge more for older people than for younger people. It may place upper limits on how much it will pay out in the event you’re sick or injured, and it might exclude coverage for certain types of health care. For example, a common exclusion is maternity care.

Because of these characteristics, short-term health insurance doesn’t satisfy the Affordable Care Act’s minimum essential coverage mandate; you’ll still have to deal with the tax penalty.

Travel Insurance

If you have to travel a significant distance to reach your volunteer service site, consider travel insurance. Although travel insurance typically covers things like lost luggage and extra expenses incurred due to travel delays, many travel insurance plans include an option for medical coverage.

As with short-term health insurance, the medical coverage portion of travel insurance isn’t subject to all of the Affordable Care Act’s rules. It may exclude pre-existing conditions, exclude coverage for certain types of medical problems, and limit its maximum payout. For example, it’s common for travel insurance to exclude coverage for injuries related to participation in extreme sports like bungee jumping and kite boarding.

One big benefit of travel insurance: it may include evacuation coverage. This coverage would help pay for the costs associated with transporting you out of a remote area to a hospital capable of treating your illness or injury. Sometimes you can upgrade this benefit to provide coverage for transporting you not just to the nearest hospital capable of caring for you, but to the hospital of your choice. For example, if you’re volunteering in central Africa, this coverage could make the difference between being transported to a hospital in a major population center of your volunteer-site country, being transported to a hospital in a more developed nearby country such as South Africa, or being transported back to a hospital in your home country.

However, once again, travel insurance doesn’t satisfy the Affordable Care Act’s mandate to have full health insurance coverage.

Coverage Under a Family Member’s Health Insurance

If you’re under age 26 and one of your parents lives in the United States and has comprehensive health insurance, you may be able to get health insurance coverage under his or her plan. This is true whether or not you live with your parents and even if you’re married. Once you turn 26, you’ll have to find other coverage, but you’ll have options.

If you’re married and your spouse has health insurance, look into getting coverage under his or her health plan. Some employers even help to offset the cost of the monthly premiums for their employees’ spouses.

With both of these options, if you’ll be traveling out of the country for your volunteer service, investigate how the insurer treats illness or injuries occurring abroad. Some cover emergencies only, some provide no coverage at all abroad, and some provide full coverage but only if you’ve been abroad for a limited period of time.

The good news about this type of coverage: if your parent or spouse gets coverage through his or her job, it almost certainly counts as minimum essential coverage. You won’t have to deal with the penalty.

Obamacare

If you’re a citizen or legal resident of the United States, consider enrolling in an Obamacare plan sold through your state’s Affordable Care Act health insurance exchange. All of these plans count as minimal essential coverage and provide comprehensive benefits without limits on how much they’ll pay toward your health care.

Additionally, you may be eligible for help paying for health insurance you buy through your state’s exchange. The government provides subsidies to make health insurance more affordable for those with incomes 400% of federal poverty level or below. There are even subsidies to help pay deductibles and copays for people with incomes below 250% of poverty level.

Read each plan’s Summary of Benefits and Coverage carefully to make sure you’ll have coverage if you plan to travel out of the country, as many don’t offer coverage while traveling abroad. If the plan you’re considering is a managed care plan, look carefully at the provider network to make sure you’ll be able to find providers in the geographic area of your volunteer service.

Obamacare Catastrophic Coverage

If you’re less than 30 years old and a citizen or legal resident of the U.S., you’re eligible to buy a catastrophic health plan on your state’s Affordable Care Act health insurance exchange. Catastrophic plans may be cheaper than regular health plans, but have very high deductibles. Because the deductible is so high, these plans best suit those not expecting to need to use their health insurance, or those with substantial savings that can afford to pay thousands of dollars out of pocket for health care before their health insurance kicks in.

If you’re 30 years old or over, you aren’t normally eligible to purchase a catastrophic plan. However, an exception to this rule allows those 30 and older to buy a catastrophic plan if they first get a hardship exemption from the health insurance penalty.

COBRA

If you currently have health insurance through your job, even after you quit your job you may be eligible to continue that coverage for up to 18 months by using COBRA continuation coverage. Under COBRA, you’ll pay the part of the premium that used to come out of each of your paychecks plus the part of the premium your employer used to pay. Additionally, you'll pay a 2% administrative fee.

COBRA coverage administrators don’t cut much slack with late payments; if you’re even a little late on a payment, you can lose your COBRA coverage permanently.

If You're Volunteering Abroad for a Year or More

If you're volunteering outside of the United States for a year or more, you may have some relief from the tax penalty for being uninsured. Those who are in a foreign country or countries for at least 330 days of the year may be eligible for an exemption from the mandate to have health insurance.

The rules governing this exemption are complicated, so speak to your tax adviser before assuming you'll qualify. You'll need to meet the standards set forth as the "physical presence test" in IRS Publication 54, A Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Some countries allow those visiting under certain types of visas for long periods of time to buy into whatever the health insurance system of the country is. Whether this option would be available and what type of health insurance system is available will vary dramatically from country to country.

If you discover this is a viable option in the country where you'll be a long-term volunteer, investigate the coverage and the health care quality available in your host country carefully before committing.

Ask yourself if you'd be content getting care in your host country if you were to get seriously ill or severely injured. If you would want to come back home in that case, then you'll also need a plan to address how you'll pay for evacuation back home as well as how you'll pay for continued medical care back in the United States if your host country's health insurance system won't cover you when you return.

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