SOURCE: Foundation for Health Coverage Education

Foundation for Health Coverage Education

May 18, 2010 11:00 ET

Health Care Reform and Young Adults: 5 Points for Families to Consider Before Taking Advantage of New Age Extension

SAN JOSE, CA--(Marketwire - May 18, 2010) -  It would seem that the enactment of the Patient Protection and Affordable Care Act, which extends the time young adults can stay on their parents' health insurance to age 26, would cause many young adults to automatically jump on to their parents' plans. The Foundation for Health Coverage Education (FHCE), a non-profit that specializes in national health coverage information for the uninsured, urges caution. 

"All participants should first review the qualifications and overall impact on their insurance policy before they make the move," advises Ankeny Minoux, FHCE president.

Beginning September 23, 2010, the new law will assist a large number of young adults who are currently uninsured. However, the new regulations are unclear about eligibility requirements and the extension's impact on the potential participant and his/her 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 Minoux.
To this end, the FHCE has put together the following five points to consider:

1. Not all states are alike. 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 D.C., 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 7 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.

2. Working young adults may not be able to participate. 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.

3. Consider the impact on your family's tax return. 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."

4. Out-of-state coverage may mean out-of-state care. While the conditions of enrolling a young adult on the family policy may result in a cost savings for everyone, it might not be practical if the young adult is an extensive distance from the family and does not have access to providers that accept the insurance in his/her 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. 

5. Consider enrollment periods. 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' plan. 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.

For the latest information regarding health insurance and the health care reform changes, please visit or call the toll-free 24/7 U.S. Uninsured Help Line 800-234-1317. The Foundation for Health Coverage Education is a 501 (c) 3 national non-profit organization with a mission to provide simplified public and private health insurance eligibility information in order for more people to access coverage.

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