The new health care reform law permits young adults to
remain on their parents’ health care plan(s) until age 26. Yesterday, the Departments of Health and Human
Services, Labor, and Treasury have issued regulations implementing the
Affordable Care Act by expanding dependent coverage for adult children up to
age 26.
- Plans and issuers that offer
dependent coverage must offer coverage to enrollees’ adult children until
age 26:
- even if the young adult no longer lives with his or
her parents
- is not a dependent on a parent’s tax return, or
- is no longer a student.
- there is a transition for certain existing group plans
that generally do not have to provide dependent coverage until 2014 if
the adult child has another offer of employer-based coverage aside from
coverage through the parent
- the new policy providing access for young adults
applies to both married and unmarried children, although their own spouses
and children do not qualify.
- The
Rule is Effective for Plan or Policy Years Beginning On or After September
23, 2010. Secretary Kathleen Sebelius
called on leading insurance companies to begin covering young adults voluntarily before the
implementation date required by the Affordable Care Act (which is plan or
policy years beginning on or after September 23rd). Early
implementation would avoid gaps in coverage for new college graduates and
other young adults and save on insurance company administrative costs of
dis-enrolling and re-enrolling them between May 2010 and September 23,
2010. Over 65 companies have responded to this call saying they will
voluntarily continue coverage for young adults who graduate or age off
their parents’ insurance before the implementation deadline. The Department of HHS Website has a
comprehensive list of those insurance companies that have agreed to the
early implementation.
- All
Eligible Young Adults Will Have A Special Enrollment Opportunity. For plan or policy years beginning on or after
September 23, 2010, plans and issuers must give children who qualify an
opportunity to enroll that continues for
at least 30 days regardless of whether the plan or coverage offers an
open enrollment period. This enrollment opportunity and a written
notice must be provided not later
than the first day of the first plan or policy year beginning on or after
September 23, 2010. The new policy does not otherwise change the
enrollment period or start of the plan or policy year.
- Same Benefits/Same Price. Any qualified young adult must be offered all of the benefit packages available to similarly situated individuals who did not lose coverage because of cessation of dependent status. The qualified individual cannot be required to pay more for coverage than those similarly situated individuals.
See the following links:
- Press Release by Secretary Kathleen Sebelius: A Long Overdue Change to Help Young Adults Get Coverage
- Department of Health and Human Services FactSheet: Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Families and Businesses
- Department of Health and Human Services Regulations: Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 under the Patient Protection and Affordable Care Act (OK, I know it's 67 pages.... read the FAQ's below!)
- Department of Health and Human Services: FAQ's