By Coverage of young adults up to 26 years of age on a parent's insurance plan is one of the most popular provisions of the new health reform law and an early win for children and families. This week, three federal agencies released joint interim final regulations on this provision. The rules confirm that all individual and group health plans, including self-insured plans, must allow young adults to be enrolled as dependents on their parent's plan starting with new or renewing policies commencing after September 23, 2010.
Under the new law, insurers cannot impose restrictions that have existed previously in determining dependent status, including student status, marital status, residency or financial support by the parent. One short-term exception does apply. Until January 1, 2014, "grandfathered" health plans may reject young adults who are eligible to enroll in their own employer sponsored insurance plan.
The term "grandfathered" health plan generally describes plans in existence on the date of enactment of the health reform law. What is not clear until additional federal guidance is issued is when or how a plan might lose its "grandfather" standing and be considered a new plan for the purpose of this and other provisions of health reform.
Plans must notify subscribers of the new provision and parents will have 30 days to enroll their adult children. The law explicitly allows a parent to enroll if not currently insured or switch coverage options for all family members. However, there is no requirement for a plan that does not provide dependent coverage at all to start doing so.
Insurers must offer all the benefit packages available to other "similarly situated" dependents. For example, if an insurer offers a choice of an HMO product and an indemnity plan to a group, it cannot limit enrollment of young adults to the HMO plan. Insurers can charge more on an individual family basis if they already do so for each new dependent enrolled or they can raise rates across the board to cover the cost of including young adults in the risk pool.
The guidance also clarifies that if a state dependent coverage law imposes stricter requirements on insurers state law is not superseded by federal law. For example, if a state allows a young adult to remain on their parent's plan until age 28, the higher age limit continues to apply to state regulated health plans. Federal law would supersede state law that has less stringent provisions such as excluding young adults who are married or not claimed as a dependent on the parent's tax return.
The administration projects that 1.2 million young adults could be covered under this new provision. As widely reported, some 65 insurers have indicated they will implement the provision early by at least allowing dependents who would lose coverage as they age out or graduate to remain on their parent's plan. This is good news as we chip away at the 47 million uninsured Americans.
How does this plan affect children with learning disabilities? I live in Illinois and my policy follows federal guidelines under the Taft-Hartley act. I am being told that no information is currently in place that will cover my child until my contract is re-negotiated in 3/2013.
Any guidance would be appreciated.
Thankyou
Does this impact with IRS 2010-38 on employers tax rights to add children currently?
I am unclear about the "new or renewing policies" part of the regulation. Is it referring to the parent's policy being new or renewed after Sept 23 2010? In other words, would a dependent, who would have lost coverage according to the old law when he passed his birthday in Sept, be unable to maintain his coverage under his parents' plan according to the new health reform law if that plan is not up for renewal until April 2011?
I see that this is the same dilemma as the preceding comment. Any suggestions?
Steve - Thanks for your question. In order to give you an accurate response, we need more information. Please send an e-mail to pab62@georgetown.edu so we can communicate with you directly?
Hi Suzanne,
Thanks for your comment. By law, health plans are not required to cover dependents until a new plan is issued after September 23, 2010 or an existing plan is renewed after that date. So for the situation you described with a renewal in April 2011, technically the insurer does not have to offer coverage until the renewal date. Many major insurers and plans are early adopters of the law, particularly allowing someone who is already covered to stay on rather than become uninsured. I would check with the plan and if they have not yet become an early adopter, you might try encouraging them to be a leader like many of their competitors. If this is an employer-based plan, you might enlist the employer to help. Public visibility of these issues helps....so if the plan declines, perhaps a letter to the editor of the local newspaper and the newspaper where the company is headquartered asking that they step up as many other companies have done might help.
It is possible that some insurers may be happy or willing to do this early, but employers won't be since it may add to their costs.
Illinois medical insurance regulation does not presently put the restriction that if a dependent can obtain his employer's insurance then the dependent cannot be on the parent's policy. Will Ill
law supersede the federal law.
My daughter was removed from my health plan on May 4 2010 the day she turned 23 (she is still a college student). I was informed by the cobra branch of my employers' health plan that I had to enroll her under cobra before Aug. 23, 2010 to be eligible on the plan when HR3590 takes affect to be eligible on my plan till age 26. The purpose I was told that if she had break in coverage on my plan she would not be eligible to be re-instated till age 26. Is this true? Any help please.
I have a child who has lapsed and am anticipating re-enrolling him. In the mean time he has developed a condition which currently requires treatment. Will I have to deal with pre-existing ailment waiting period issues?
i want to know will my dependant adult child's insurance end right on her birthday date where she will turn 26.
The new regulation starts jan 1 2010 she turns 26 on january 8 2010. This help
is actually no help