Children Better Protected in Health Insurance Reforms

At last, there is an accelerating trend in health insurance that’s good news for many parents. More than two dozen of America’s states have signed into law or recently passed legislation requiring employer health-care plans to provide coverage for a longer time for adult dependent children still living at home. Typically a child loses health-care coverage under a parent’s plan at the 19th birthday, though full-time college students usually remain covered until graduation.

When children get booted from the plan, it can touch off an anxious scramble for often expensive replacement coverage, especially if it involves federally mandated COBRA insurance. While the legislative specifics vary, many states in the past three years have pushed the health-care coverage cut-off date for adult dependent children to age 25. New Jersey allows for coverage to age 30 — the highest age limit in the nation.

One man became intimately familiar with this dependent-coverage issue recently while researching health plan options for his oldest offspring, who was about to graduate from college and go off his employer’s group health policy. Given the complexity of our health-care system, many parents are probably unaware of these legislative changes and how they can affect children starting out on their own.

The reforms are aimed at helping some of the nation’s 45 million uninsured. Young adults 19 to 29 are considered to be the fastest-growing part of the uninsured population, according to the Commonwealth Fund study released Tuesday. Only 41 percent were insured during all of 2007, the study said.

Many young adults do not have health-care coverage, because they are either unemployed or in a job with no benefits. In addition, rising premiums make insurance less of a priority for the relatively healthy. Even if your children are young, keep an eye on this health-insurance trend. Down the road, it could have real implications for their educational and career choices. For example, will a college degree translate into a ready job with health-care benefits?

It could even become a factor in where you choose to live — a state that allows dependent coverage for a few years beyond college as opposed to a state that does not. Some laws extending coverage allow insurers to charge extra premiums, but for the most part, there should be little change in the cost of keeping an adult child on a plan a few years longer.

“Adult children are probably the least expensive to cover,” said Ed Fensholt, senior vice president and director of compliance services at Lockton Benefit Group in Kansas City.

What about families whose health plan is self-insured — that is, where the insurance is financed by the employer, as opposed to plans in which the employer buys coverage from an insurance company? Self-insured plans in general are not covered by the changes in dependent cut-off dates because they are subject to federal regulations.

Fensholt was not surprised by the push in dependent coverage and predicts the number of states endorsing it will accelerate. Kansas is among the states now reviewing this issue. While this coverage reform cannot solve all the problems of our nation’s uninsured, at least it provides a safety net for many young adults until they can purchase their own coverage. “As a parent, I worry about my kids getting hurt or requiring medical attention and not having insurance,” Fensholt said. “Here now is a decision I can remove from their control and have piece of mind.”

It is recommended that parents talk to their high school or college age children about the importance of earning a degree or learning a trade that will translate into immediate employment — with health benefits.

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