Young adults up through age 26 who continue to stay on their parents' health insurance plans under the new healthcare reform provisions cannot be required by health insurers to pay more for their coverage than those family members currently covered, according to a new interim final rule released Monday by the Department of Health and Human Services. Also, under the rule, plans cannot vary benefits based on the age of the child.
The provision does not officially go into effect until Sept. 23, but more than 65 insurers, including WellPoint, Aetna, and Kaiser Permanente have agreed to implement it as early as this month to let graduating college seniors receive coverage through their parents' plans.
Annual premium costs for adding a young adult—using a mid range estimate—would be $3,380 in 2011, $3,500 in 2012, and $3,690 in 2013, according to HHS. This would raise premium costs for employers by 0.7% in 2011, 1% in 2012, and 1% in 2013. For non-group or individual policies, the annual premium costs are anticipated to be $2,360 in 2011, $2,400 in 2012, and $2,480 in 2013.
Approximately 2.4 million young adults are expected to be eligible for coverage under their parents' plans. In 2011, roughly 1.24 million (using mid-range estimates) are anticipated to enroll for dependent coverage; this number is expected to rise to 1.6 million in 2012 and 1.65 million in 2013.
Under the initial healthcare reform legislation, insurers or employer plans could provide coverage only to a child "who is not married." However, this language was changed under the healthcare reconciliation measure passed by Congress, and coverage now can be provided for a married child. However, an insurer or plan is not required under the interim final rule to cover that child's spouse or children.
Employer sponsored health plans that are considered "grandfathered" under the healthcare reform plan and therefore exempt from various requirements still will be required to offer insurance for dependents up until age 26.
However, grandfathered plans can exclude an adult child under 26 if that child is eligible to enroll in another employer sponsored health plan such as a plan through their job unless it is the plan of the other parent's employer. But, beginning in 2014, that exclusion will not be available to them.