Johnny Has No Health Care Plan, Should You Put Him on Yours?

When the health care bill was signed into law in March 2010, it gave adult children the ability to remain on their parents’ group insurance plan until the age of 26. While some states already had laws in place allowing adult children to remain on their parents’ plan, many variations and limitations existed. For example, the maximum age limitations differed among states and many states required the insured individuals to be enrolled as full-time students. The new health care law now allows any adult child under the age of 26 to continue receiving health care insurance coverage from his or her parents’ plan if he or she does not already have access to an employer-provided plan, including self-funded plans.
While this change is hugely beneficial to struggling young adults, some graduates may not be immediately able to switch onto their parents’ plans. The effective date of this provision is September 23, 2010, which is a full six months after the initial passage of the health care bill. Unfortunately, the situation becomes worse since insurers are not required to extend coverage to qualified adult children until the start of each new plan year. Because most insurance plans operate on a calendar year basis, the effective date will not be until January 1, 2011.
Fortunately, in April 2010, a number of insurance companies have announced that they will extend coverage ahead of the mandated schedule. These companies include WellPoint, United Healthcare, Humana, and Kaiser Permanente. Effective immediately, United Healthcare and Humana will allow young adults under the age of 26 to remain on their parents’ insurance plans. WellPoint, which manages 14 BlueCross and BlueShield plans nationally, will begin the extended coverage on June 1, 2010. Kaiser has agreed to adopt the new coverage plan starting in September 2010.
The following are tips for parents of young adults who are interested in taking advantage of this new provision.
Ensure that there are no coverage gaps in your child’s health insurance. Be sure to contact your plan administration to determine the date that the extended coverage will become available. If the effective date is not until January 2011 and your child will be graduating before this date, other options must be considered. One alternative is a short-term health insurance plan that will cover your child until his or her extended coverage is available. Another alternative is COBRA, which is a federal law that requires companies to permit their employees to maintain insurance coverage for a total of 36 months if they or a dependent on their policy is no longer eligible for the group plan. Be aware that COBRA is rather expensive since you must pay 100% of the premium along with administrative costs.
Check into the cost of buying group health care insurance for your child. A number of employer-provided plans charge a flat family premium. Other plans base their premiums on the number of dependents covered. Be aware that if you currently have the latter plan, adding an adult Healthy Habits List For Students child could increase your cost. It is also important to realize that the new law does not prevent employers from charging a higher premium to cover an adult child so be sure to specify the changes you anticipate making in your current plan when speaking to your provider.
Determine if extending your insurance to cover your child is the most economical way to insure him or her. It may be more beneficial and cheaper for your child to buy a high-deductible individual insurance plan than to add your child to Disadvantages Of Vitamins your existing insurance policy. Young and healthy individuals can buy insurance policies with a $5,000 deductible for less than $100 a month. Luckily, it is not difficult for young adults to find an individual health insurance policy.
Since it may take time to find the most economical policy, ask your employer what it will cost to add your child back onto your insurance plan as you shop for an individual plan. Also be aware that if your child has medical problems an individual insurance plan may not be an option for him or her. Generally, group insurance is much cheaper than an individual plan and often provides more extensive coverage. Additionally, group plans cannot deny coverage to eligible members with pre-existing medical conditions.