New legislation means that parents can keep their children on their individual or group health insurance plans until they are 26 years old, regardless of whether they are still studying, are married or single, or live away from their parents. This gives parents and their offspring another option, apart from programs for low-income individuals or health plans aimed at students.
Less than 1 in every 3 people in the USA aged between 19 and 29 currently has health coverage. This new legislation aims to address this. The uninsured rate among employed young adults is about 33% higher than older employed adults.
Authorities say that the majority of companies that have many employees will be offering health insurance for adult offspring, open-enrollment will start this autumn for plans that start at the beginning of 2011. According to HighRoads, a human resources consulting company, approximately three-quarters of companies in their survey will provide employees with information regarding adult-child health-insurance coverage, as well as some other plans.
Many experts comment that parents should be aware of the financial savings by keeping an adult offspring on the health plan provided by their employer.
Under group health insurance plans, employers pay 70% of the family coverage premium and the employee pays 30%.
This does not mean a parent’s offspring will be eligible for coverage straight away. Although the provision is from September 23rd, extending the coverage for an adult child does not have to begin until the start of a new plan year, which in most cases is January 1st. It is important to remember that coverage is not automatic – parents have to add their child when they enroll in their plan for the coming year. If a child becomes eligible after the end of the enrollment period, their parent’s employer will have to give them 30 days to enroll.
If parents enroll their adult children during the 30-day enrollment period, their plan must cover their adult child from the first day of that plan year or policy year.
According to the US Department of Health and Human Services, saying that young people do not need health insurance is a myth. Approximately 1 in every 6 young adults in the USA has a chronic illness, such as asthma, diabetes or cancer. Almost half of all young American adults say they have difficulties paying their medical bills.
Written by Christian Nordqvist