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Details on Health Care Law’s Under-26 Coverage Rules

As you may recall, the health care bill [3] that was recently signed into law included provisions for the extension of dependent health insurance to those under 26. Specifically – “Young adults will be able to stay on their parents’ health plans until the age of 26. Many health plans currently drop dependents from coverage when they turn 19 or finish college.”

This week the government released the details [4] of how this would work.

Health Plans that cover Dependents: If your health care plan currently covers dependents, the rules takes effect on or after Sept. 23, 2010. The rule would now require that the policyholder’s children be covered until the age of 26 unless they have access to an employer-sponsored plan. If they were previously dropped, they can re-enroll as long as they don’t have access to an employer-sponsored plan. The child does not need to live with the parent and does not need to be claimed as a dependent on the parent’s tax return. If the health insurance plan’s open enrollment period isn’t in the fall, the plan must give dependents 30 days to decide whether or not to enroll.

So far, 65 insurance companies have allowed students graduating from college to remain on their parent’s plans. (you read this list on the 4th and 5th page of the White House release [4].

Health Plans that don’t cover Dependents: If your health care plan doesn’t cover dependents, then it won’t be required to cover children until Jan. 1, 2014, when a child can re-enroll if they do not have access to an employer sponsored plan. The rules are the same, the implementation date is just further out.

How much will it cost? “The health department estimated that the average cost to cover each new enrollee would be $3,380 in 2011, $3,500 in 2012 and $3,690 in 2013.” (from NYT [5])

The White House also shared some sobering statistics – 30% of young adults are uninsured, making it the largest percentage of any age group. They don’t share the source of this statistics but I remember, when looking for a job, that health insurance was the biggest concern. Before the recent law, I wouldn’t have health insurance under my parents once I graduated. I didn’t know how much it cost on the private market and I was fortunate not to have any pre-existing conditions, but the prospect of being uninsured was a little daunting. It’s like being on a ship without having a life preserve under your seat, 99.99999% of the time you’re fine, but that slim chance of disaster is still scary.

(Photo: lenifuzhead [6])