Beginning September 23, 2010, the Patient Protection and Affordable Care Act will assist a large number of young adults who are currently uninsured by extending the age of coverage from their parents' health insurance to age 26. However, the new regulations are unclear about eligibility requirements as well as the extension's impact on the potential participant and the family's policy.
"If you or your young adult children are currently uninsured, the place to start is by educating yourself about your potential options, based on your personal circumstances," said Ankeny Minoux, FHCE president. "All participants should first review the qualifications and overall impact on their insurance policy before they make the move."
To help families decide if extending coverage to their young adults, the FHCE has put together the following five points to consider.
The first step is to learn about the rules that apply to your state. The new federal law establishes a minimum level of dependent coverage up to a young adult's 26th birthday. If your state law requires more coverage than the federal law, it's likely that the state law will still apply.
Alabama, Alaska, Arizona, Arkansas, California, Washington DC, Hawaii, Michigan, Mississippi, North Carolina, and Vermont currently have no state laws that require insurance companies to extend dependent coverage to young adults. As a result, most insurance for dependents ends at age 19 or upon graduation from college. Residents in these states will likely see the most direct gain from this dependent coverage expansion. The other 39 states have some form of dependent coverage expansion, but many are restricted to specific populations, such as disabled young adults or full-time students.
Among states that already have coverage expansions, only seven states (Connecticut, Florida, Illinois, New Hampshire, New Jersey, New York, and Utah) already extend dependent coverage to non-students up to age 26 or older in both individual and group market plans.
Tapping into the family's insurance policy could save everyone money, but the House's Reconciliation Bill states that until 2014, for already existing health plans, insurance companies are only required to provide insurance to dependents if the dependents do not have access to insurance on their own employer-sponsored plans. Insurance companies are thus not required to allow participants to make that switch, although some may choose to allow it. The first step should be consulting all involved insurance parties to learn about their specific regulations.
For young adults who are not listed as dependents on their parents' tax return, the law raises additional questions regarding eligibility of uninsured independent young adults. This question has not yet been answered by the law, and it will likely be determined by how the regulations define the term "dependent."
While the conditions of enrolling young adults on the family policy may result in a cost savings for everyone, it might not be practical if the young adults happen to live an extensive distance from their families and do not have access to providers that accept the insurance in their state of residence. For example, a local HMO may have a closed network of providers within a limited geographic area. This review of local providers should be an important step in making the decision to put young adults on their parents' plans.
While the new provision goes into effect September 23, 2010, the law doesn't state that insurers must change their enrollment periods in order to accommodate these adult children who have previously aged out of their parents' health insurance plans. The good news is that a number of insurers, including WellPoint, Cigna, Aetna, United HealthCare, Humana, Kaiser Permanente, and BlueCross and BlueShield plans, have announced they will allow young adults up to age 26 to join their parents' plan now, well ahead of government fall deadline. Check with your provider for more information.
For the latest information regarding health insurance and the health care reform changes, please visit www.CoverageForAll.org or call the toll-free 24/7 U.S. Uninsured Help Line 800-234-1317.
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